In rural parts of Vidarbha, farmers still prefer microfinance institutions (MFIs), which provide loans at 21% per annum, to nationalised banks, whose rates are merely 7%, for taking loans to meet their requirements. The reason being that unlike banks, MFIs’ loans are easily accessible and that too well in time. Interestingly, banks are also thinking of hiring MFIs people for recovery of loans. In Vardha district farmers are ready to pay the interest rates being charged by the microfinance institution. An SBI official in the district told FE that “As it is a difficult job for us to recover loans from the farmers, we are in talks with people from Basics, a MFI, to use their services as recovery agents for my bank”. Confirming it, Avinash, Vardha branch manager of Basics, said that “Yes, SBI has approached us for the same but nothing concrete has happened as yet”.
Nevertheless, the debt waiver scheme has brought a ray of hope among bankers in the district, as it will bring down their NPAs in the agriculture sector by half. In Vardha alone, NPAs in the agriculture sector stand at 4-5%. The state-run Nabard is implementing the scheme through RRBs and co-op banks in rural areas. The bank’s executive director, Amaresh Kumar, claimed that there have been no cases of farmers’ suicide, wherever the watershed development programme has been undertaken by Nabard.
