Huge ADB help coming for cooperative sector
THE AILING cooperative sector of Madhya Pradesh may soon see better days. After the recent signing of a Memorandum of Understanding under Vaidyanathan Committee formula for getting a financial assistance of Rs 2500 crore, the sector is likely to get assistance from Asian Development Bank (ADB) also under the Rural Cooperative Credit Restructuring and Development Programme.india Updated: Dec 13, 2006 12:39 IST
THE AILING cooperative sector of Madhya Pradesh may soon see better days. After the recent signing of a Memorandum of Understanding under Vaidyanathan Committee formula for getting a financial assistance of Rs 2500 crore, the sector is likely to get assistance from Asian Development Bank (ADB) also under the Rural Cooperative Credit Restructuring and Development Programme.
Madhya Pradesh is among five states that will get a loan of one billion dollar from the Manila-based funding agency for the reform of rural finance.
The programme is targeted at revitalising the cooperative credit structure to more effectively reach out to the masses of small farmers.
The Madhya Pradesh Government is likely to use this fund for reviving the Land Development Banks. The programme, the largest such action undertaken by ADB in the country, would address farmers’ problems by undertaking a comprehensive reform of the cooperative credit structure.
The Rural Cooperative Credit Restructuring and Development Programme would enhance the legal, regulatory and governance framework to ensure members’ control over the cooperative credit structure and facilitate effective enforcement of prudential norms.
“The loan has been approved and sanctioned. But the details are yet to be worked out. What has been approved is just a framework,” a senior officer of Finance Department told Hindustan Times.
After entering into a formal agreement with the Union Ministry of Finance, the bank officials would sit with representatives of NABARD (National Bank for Agriculture and Rural Development) to work out the details. “Issues such as how to structure the loan are likely to be sorted out in next few weeks,” he added.
A Department of Cooperative Revitalisation and Reform has been set up NABARD to support the reforms and a National Implementation and Monitoring Committee has been constituted to oversee the process. State and district-level implementation committees are being set up as well. The loan carries a 15-year term, including a grace period of three years.
When contacted, Registrar Cooperatives, Prabhat Parashar said that the ADB loan would be used for reviving LDBs. “Already the State has undertaken reforms in the cooperative sector and the further addition in the financial assistance would help in a big way to revive LDBs,” he added.