INDIA LEARNING EXPERIENCE REPORT India is one of the worlds largest democracies with a population of 1120 million people.

India was faced with one of the worlds food disaster in record in 1943. The acute food shortage continued to haunt the country because the population was growing at a much faster rate than food production. This called for drastic measure/ion by the national government and in 1969 national bank of agriculture and rural development was formed (NABARD) to promote sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives. NABARD To achieve the countrys mission and vision, NABARD was tasked to do the following
FINANCIAL PLANNING

PROMOTIONAL & DEVELOPMENTAL REGULATORY & SUPERVISORY RESEARCH The role of NABARD is a clear illustration on how a national single entity can be entrusted to champion agricultural financing and rural development. This has been a policy issue particularly in the African continent where Central Banks expected to formulate and implement policies in favour of Agricultural and rural financing but with little or no success at all. To me, India is a good example where the banking sector is sector based with every sector having a national body to oversee and to champion the growth of the respective sectors like NABARD. After 30 years of operations NABARD has consolidated a wealth of practical and applicable knowledge and experience which they are now sharing with rest of the world and more so the African continent which is being faced with food shortage. TRAINING AND EXPOSURE The training is based on practical experience gained over the last 30 years of operation. It provides an in depth understanding of the agricultural and rural development and also offers a step by step point of intervention to achieve maximum benefits. Even though they can tailor make the training to suit specific needs, I found the following five areas of interest to policy makers, donors, and rural development agents. Rural non-farm sector support: This is defined as any industrial, processing or services activities including artisan activities in rural areas or where the main beneficiaries are rural population.

This is aimed at evolving loan products, and channeling policies for the rural Industrial Sector (small, tiny, cottage and village Industries, handicrafts and other rural crafts and related service sector) through networking with banks, NGOs, other agencies for promoting entrepreneurs so as to generate sustainable employment opportunities for the rural population with focus on poor women and other weaker sections. Institutional development: Every organization is unique in itself. It is established to play specific role as per its mandate. As such Rural Financial Institutions in India have their definite role to usher the spate of development of rural economy. There is an illustration on how to develop RFIs to spar economic development of the rural population. The training entails how to sponsor these institutions and how they are regulated to ensure transparency and compliance with the set rule and regulations. Agricultural financing policy: This is aimed to ensure formulation and implementation of policies that are responsive to the growing demand of agricultural finance. NABARD is tasked to play this role. The following are some of the policy interventions that are directed towards agricultural financing: Priority Sector lending 40% of net bank credit for agriculture, allied activities, Small Business, Retail Trade, Small Road Transport Operations 18% for net bank credit for agriculture in direct or indirect way Broad basing definition of agriculture to include certain infrastructure to include cold chains, etc Multiple agency approach Constitution of Rural Infrastructure Development Fund (RIDF) in NABARD since 19959- for funding rural infrastructure Introduction of Kisan Credit Cards (KCCs) to provide hasslefree and timely credit Formation of SHGs to produce group collateral Agricultural Insurance to insure against crop failure Special package for distressed and severely affected areas Debt Waiver and Debt Relief Scheme to make the borrowers eligible for fresh loans Reduction in margin and collateral requirement to help small borrowers Formation of Joint Liability Groups to help tenant farmers

Microfinance models and development: Microfinance can be defined as Microfinance is micro-credit + savings, insurance, remittances, housing loans, etc. + provision of entrepreneurial skills/training + advisory services on health, sanitation, nutrition, education and other livelihood issues. The training gives insights on establishing and running of self sustainable microfinance institutions by way of provision of conducive economic environment and political good will of the national government. After the training there is field exposure to the identified projects that have been successfully implemented under the supervision of NABARD. In conclusion this experience is one of the best that illustrates how well formulated policies on agricultural finance backed by political good will of the ruling governments can transform lives and livelihoods of the rural population and spar economic development of a nation. One of the key policies advocated to unlock the agricultural finance in Africa and has also been noted in Zipping Finance and Farming in Africa: Harnessing the Continents Potential, Kampala 29-30 June 2011 is to Address Agricultural Finance policy strengthening through establishing a specific high-level coordination body and by recognizing a single entity as the advocate for Agricultural Finance. To achieve this NABARD is a learning point where much can be borrowed from India to establish such a national body with specific mandate to address agricultural and rural financing.