C Rangarajan, member, Rajya Sabha and former economic adviser to the Prime Minister, said that the NSSO data reveals that 45.9 million farmer households in the country (51.4%), out of a total of 89.3 million households do not access credit, either from institutional or no-institutional sources. Further, despite the vast network of bank branches, only 27% of total farm households are indebted to formal sources (of which one-third also borrow from informal sources). Farm households not accessing credit from formal sources as a proportion to total farm households is especially high at 95.91%, 81.26% and 77.59% in the north eastern, eastern and central regions, respectively.
Thus, apart from the fact that exclusion in general is large, it also varies widely across regions, social groups and asset holdings. The poorer the group, the greater is the exclusion, he said.
Rangarajan while addressing 20th Skoch Summit 2009 here on Friday said, ?The question that is before us is how to extend the scope of activities o the organized financial system to include the low income groups.?? The institutions which currently provide financial services in the rural areas include branches of commercial banks, regional rural banks, cooperative societies and micro-finance institutions.