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Does Informal Credit Provide Security? Rural banking policy in India.

Author(s)V. K. Ramachandran, M. Swaminathan
Type of Toolpaper
Region(s) / Country(ies)Asia/Pacific
Informal Economy AspectsAccess to credit, Social protection
Web links
Does Informal Credit Provide Security? Rural banking policy in India (136kb)
 - ILO InFocus Programme on Social and Economic Security
ILO Sector(s)Social Protection
ILO Unit(s)IFP/SES - InFocus Programme on Socio-Economic Security
Keyword(s)microfinance, socio economic security

This paper deals with rural banking and credit policy in contemporary India and with the effect of the current policy of financial liberalization on the credit portfolios of rural workers. It examines, first, the major directions of rural banking and credit policy and indicators of performance of this activity in India since 1969, the year in which 14 major commercial banks were nationalized. Secondly, it attempts to describe and analyse features of indebtedness of rural households, particularly rural worker households, in a south Indian village during different periods of national banking policy. Thirdly, it attempts to evaluate the potential of a new policy alternative microcredit projects controlled by non-government organizations - as a solution for problems of rural indebtedness.

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Last update: 24 March 2005