RBI bulletin show rise in small agri debts, fall in personal loans

In the latest monthly bulletin published by Reserve Bank of India the figures of agriculture credit sector clearly indicates that there has been increase in the number of small loan accounts held with nationalized and cooperative banks during last few years. According to the figures published there has been significant increase from 35.5% in 2004 out of the total small accounts to 41.8% in 2006, an increase of more than 17%.

However, during the same period, the share of small personal loan accounts has come down from 41.8% to 35.5%. But the share of small borrowers in the banking sector is still going down with their share of accounts dropping down from 96.4% in March 2001 to 90.3% in March 2006 and their share of the total loan volumes shrinking from 19.7% to 16.4% during the period.

Recently RBI conducted a survey of Small Borrower Accounts, which covered 33.8% of the 7.71 crore small borrower accounts with credit limits of Rs 2 lakh. As per survey details though the share of small borrowers continues to decline, the share of agriculture loans in the total small loans has increased substantially from 33.4% to 41.2% an increase of 8.8 percentage points just over in two years. Though the share of the amount outstanding against agriculture loans only went up from 29.1% to 31.1% during the period.

As per survey reports a considerable disparity has been found in the share of small borrowers across the states. The states with the highest share of small borrowers accounts were the poor and middle income states like Andhra Pradesh (94.2%), Bihar (95.9%), Jharkand (93.8%) and Tamil Nadu (94.5%) while that with the least share included rich states like Delhi (76.7%), Maharashtra (78.9%) Punjab (80.2%) and Haryana (82.7%). Likewise the share of small borrowers in total borrowings was found highest in least developed states like Bihar (56.9%), Assam (42.1%) and Orissa (41.9%) whereas it has been least in the developed states like Delhi (3.8%), Maharashtra (5.8%), and Gujarat (15%).

The RBI bulletin stated the worst impact has been seen on industry where the share of small borrower lending has declined marginally both in terms of number of accounts and amount outstanding to 3.7% and 4% respectively. According to figures of individual loans, the unfairness against women continues to increase.

There has been increase in the share of males both in total number of small borrower accounts and also in the amount outstanding, while the share of women has declined by 1.7 percentage points to 16.5% in the case of number of loans and by 1.1 percentage points to 13.9% in the case of loans outstanding....