Nabard Financial Services (NABFINS), a subsidiary of National Bank for Agriculture and Rural Development, will expand its services in the rural unbanked areas of Odisha, Jharkhand, Madhya Pradesh and Rajasthan.

Set up five years ago, with the intent of providing low-cost rural finance in Karnataka, NABFINS is now present in 66 districts spread mostly across Karnataka and Tamil Nadu.

NABFINS provides finance at about 16 per cent a year to self-help groups. This is much lower than the 22-24 per cent charged, even by the best performing microfinance institutions (MFIs).

Harsh Kumar Bhanwala, Chairman, Nabard, said: “The company has initiated work in Maharashtra and Andhra Pradesh. The average lending rate for an MFI is 22-24 per cent, but NABFINs is lending at about 16 per cent. At affordable rates, it is possible to give financial services at the doorstep of people in rural areas.”

The NABARD chief said that the development finance institution lends to NABFINS at 9.6-9.7 per cent. “After accounting for all expenses, NABFINS earns a margin of 2-2.5 per cent,” Bhanwala said. Nabard owns 61 per cent stake in NABFINS.

Nabard results Nabard has requested the Centre to allocate ₹200 crore for the promotion and funding of 2,000 producer organisations in rural areas in the next three years. Producer organisations are a group of farmers who come together to jointly grow, harvest and market their produce. This is in addition to the ₹1,500 crore it has requested from the Government in terms of equity infusion.

In 2013-14, Nabard’s balance sheet size increased by almost a fifth to ₹2,13,170 crore. It earned a net profit of ₹1,860 crore, about three per cent more than the year before.

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