i) Biometric identity
Globally, rural credit suffered due to lack of borrowers' identity and associated credit history.
Bio-metrics enabled payment system is being implemented by banks in India under active
support from the state. Biometric (AADHAR) cards have been issued to over one billion
people of the country. It helps banks addressing identity issues and develops credit history of
borrowers.
ii) National electronic agriculturemarket
Using modern communication technology, the state is also creating an e-market platform to
connect all major wholesale agriculture markets in the country. This particular step would
ensure fair price to farmers fromall corners and settlement of bank dues electronically.
c. Financial infrastructure
To address the multiple constraints faced by most small farmers, bundling nancial services with
non-nancial services is essential. A few initiatives in this direction are:
i) Extension services
India has been following a
Credit Plus
approach. Specialised centres viz. Krishi Vigyan
Kendra (Agricultural Science Centre), Agricultural Technology Management Agency
(ATMA), Centre of Excellence for vegetables, citrus fruits etc have been created across the
country to bring about technological changes in the sector.
ii) PradhanMantri Jan-DhanYojana
In India, there has been a signicant state sponsored push to increase usage of nancial
products by the rural populace. The objective is to provide banking services to a large
proportion of unbanked population, mostly rural. The Prime Minister's Jan Dhan Yojana
(PMJDY) that includes a savings account, overdraft facilities and insurance benets, is the
largest outreach programme in the world. PMJDY has led banks to cater to the new demand
for formal banking credit by previously unbanked borrowers.
iii) Micro-nance services
Financial inclusion, micro nance & rural credit are intricately related. India runs the world's
largest rural women oriented micro nance programme. The programme, known as Self Help
Group Bank Linkage Programme (SHG-BLP), hinges on group approach. SHGs are now a
mainstream loaning channel for rural bank branches. So far, more than 7.7million SHGs have been
promoted with an approximate women membership of 100 million and more than 4.4 million of
such groups have been credit linked through formal nancial institutions in far and remote areas.
Besides, digitizing the member data and nancial records of these SHGs has been piloted and is
now being scaled up. It would help banks in assessing groups' credit absorption capacity,
addressing identity issues and avoidingmultiple nancing.
B. PakistanExperience
Another major stakeholder of South Asia is Pakistan. Promotion of nancial inclusion by developing agri
credit market, rural SMEs and micronance sectors are one of the top priorities at State Bank of Pakistan
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