India's agriculture loans exceed target by 13%

Agricultural credit flow by Indian cooperative and public sector banks exceeded the target by 13% in the 2009-10 financial year.

"The flow of credit to the agriculture sector increased significantly and banks have surpassed the target by extending INR367,000 crore (US$78.71 billion) worth of loan to farmers," an Agriculture Ministry official informed.

The banks including public sector, cooperative and regional rural banks (RRBs), set a target to lend INR325,000 crore (US$69.68 billion) of credit to farmers last fiscal year.

The farm credit was extended to as many as 4.82 crore farmers last year and banks gave crop loan to 91 lakh new farmers.

According to official data, public sector banks lent INR275,000 crore (US$58.96 billion) of farm credit, while co-operative and RRBs loaned INR58,000 crore (US$12.43 billion) and INR34,000 crore (US$7.28 billion) respectively in 2009-10.

The total farm credit flow in 2009-10 fiscal year was higher than the previous year's INR302,000 crore (US$64.74 billion), the official said.

Usually, farmers are given credit at an interest rate of 7% per annum. However, in a move to reward those farmers who make their loan payment on time, the Central Government reduced their loan interest rate to 6% last year and 5% this year.