The Hindu Business Line : SLBC decides to increase lending to AP tenant farmers

THE Andhra Pradesh State Level Bankers Committee (AP-SLBC) has decided to increase its focus on lending to the leased land farmers (tenant farmers) in the State.

The move is aimed at providing supplementary income levels and wean them away from moneylenders.

For the first time in the country, the bankers committee has evolved new method of lending by forming the tenant farmers into groups on the lines of self help groups, the AP-SLBC Convenor, Mr A.L. Nageswara Rao, said.

As against the traditional crop loans, the Committee has diversified its lending in the form of term loans, allied credit, consumption loans and loans against produce to help farmers avoid distress sale of their produce.

Apart from direct lending to farmers, the Committee was also exploring means to route the credit through micro finance institutes and non-governmental organisations, Mr Rao said.

"Keeping in view the legal hassles involved in lending to the tenant farmers in the absence of formal agreements with the land owners, the bankers committee has evolved a mechanism of encouraging farmers to form `Rythu Mithra Groups' (RMGs)," Mr Rao told Business Line.

The SLBC has set a target of providing credit to at least 52,700 RMGs across 22 districts in the State involving a total financial outlay of Rs 257 crore during the current fiscal. This is against an amount of Rs 28.14 crore sanctioned to 4,375 RMGs in 10 districts of the State during last fiscal.

With the kharif season set to start, the AP-SLBC has already begun the awareness programmes among the farmers groups on the availability of formal credit at cheaper rates and easier terms with varied options.

"For the first time in the country, we made a successful beginning during last fiscal in lending to tenant farmers in the form of RMGs. This fiscal, we have decided to step up the credit targets and number of tenant farmers.

"With more and more lands being leased out, we have been witnessing a significant growth in the number of tenant farmers across the country. All these days, these tenant farmers were denied credit in the absence of formal agreements with the land owners," Mr Rao said.

Stating that a number of fine tunings would be required while going forward with lending to the tenant farmers, Mr Rao said that of around 1.2-crore farmers in the State at present, nearly 30 lakh were tenant farmers. The number of tenant farmers has been fast increasing owing to various factors, he added.

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