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FIs urged to design model that allows community collateral
Our Bureau
Hyderabad
,
Oct. 20
PROF Yoginder Kumar Alagh, former Union Minister of Power and Planning and a noted economist, has asked the financial institutions to design structures that allowed community collateral for taking loans for viable projects.
Delivering the first World Food Day 2005 lecture on `Water and Growth - culture and issues' here on Tuesday, Prof Alagh said self-help financing groups, land and water development groups, local infrastructure projects developed by local and community groups could be considered for such lending.
The lecture was organised by Andhra Pradesh Farmer managed Groundwater Systems Project and Food and Agriculture Organisations of the United Nations.
Currently, laws recognise only a corporate entity or a Government department for lending.
"It is not so if you are an NGO, a farmers' producer group or an irrigation or producer cooperative that wants to work under the Company Law," he said.
These newer structures had to be included in law although existed on the ground. "Neither global institutions fund them. Nor banks," he pointed out.
He said private capital formation in agricultural and on farm development had gone down since1999-2000. Long-term credit had fallen.
He later released the book `Springs of Life' (on India's water resources).
Mr Daniel J Gustafson, FAO's representative to Indian and Bhutan, felt that agriculture should be made more profitable as farmers were not able to gain despite achieving higher output.
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