Abstract:
Credit is a successful idea in India. The National Bank for Agriculture and Rural Development
(NABARD) conducted a research in India during the early 80s. The research showed that an
extensive network of rural bank branches, with implemented specific poverty alleviation
programmes, sought the creation of self-employment opportunities through bank credit for almost
two decades. Despite this initiative, a considerable number of formal banking systems have not taken
off yet. NARBARD had been set up in 1982 under an act of Parliament. This banking system has been
set up as a development of agriculture, cottage and village industries. Handicrafts and other allied
economic activities in rural areas are initiated and encouraged with a view to promoting
entrepreneurship among the rural people. Rural development, special schemes and rural banking
could not, however, tackle the widespread poverty in rural areas. Research indicated that existing
banking policies and procedures were perhaps not suited to the immediate needs of the very poor.
What they needed was better access to these services and products, rather than cheap, subsidised
credit.
