Give loans to the poor, India banks told

Prime Minister Narendra Modi has urged India’s banks to lend more to the country’s millions of impoverished farmers in a bid to halt suicides by debt-laden agricultural workers. FILE PHOTO |  

In Summary

• Speaking at an event on increasing financial inclusion on Thursday, Mr Modi said he was pained to hear of increased reports of farmers taking their own lives after being unable to repay unscrupulous money lenders.
• Families say they were left with no choice after crop damage from unseasonal storms along with poor market prices for produce and other reasons compounded already dire financial problems.
• Farmers and other poor have long been unable to borrow from traditional banks because of a lack of capital, forcing them to become dependent on loan sharks and other lenders who often charge exorbitant interest rates.

By AFP
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MUMBAI, Thursday

Prime Minister Narendra Modi has urged India’s banks to lend more to the country’s millions of impoverished farmers in a bid to halt suicides by debt-laden agricultural workers.

Speaking at an event on increasing financial inclusion on Thursday, Mr Modi said he was pained to hear of increased reports of farmers taking their own lives after being unable to repay unscrupulous money lenders.

“Can’t we ask ourselves how we can make our banking system so strong that no farmer is forced to give up his life just because he can’t repay the loan (from money lenders)?” Mr Modi said.

CHANGE MINDSETS

“We have to change mindsets. We have to think on ways to include the poor as we move forward,” Mr Modi said at the event at the Reserve Bank of India (RBI) in Mumbai, alongside its governor Raghuram Rajan and Finance Minister Arun Jaitley.

“We can pull the poor out of poverty, they just need a bit of hand holding,” he said.

Local media have reported scores of farmer suicides in recent weeks.

Families say they were left with no choice after crop damage from unseasonal storms along with poor market prices for produce and other reasons compounded already dire financial problems.

Mr Modi said 140 million people have opened bank accounts since his reformist government launched a major financial inclusion initiative last year.

UNABLE TO BORROW

But he stressed that more needed to be done, and asked the RBI to come up with a 20-year roadmap for greater access to the formal banking system.

Farmers and other poor have long been unable to borrow from traditional banks because of a lack of capital, forcing them to become dependent on loan sharks and other lenders who often charge exorbitant interest rates.

ANGER MOUNTING

India’s poor but powerful farming lobby flocked to Mr Modi’s party at the general election last May when the Hindu nationalist premier won the biggest mandate in 30 years.

But anger in rural areas has recently been mounting over his government’s bid to overhaul land purchasing laws making it easier for businesses to buy farming and other plots for much-needed infrastructure, defence and other projects.