Announcement of India Receives Seventy Million Dollars for Agricultural Credit on April 17, 1975

.INTERNATIONl~L DEVELOPMENT ASSOCIATION 181B H STHEET NW Wi\SHIN(::ToN O C ::'!0,133 TELEPHONE EXrnJT'IVF 3-6360 IDA News Release No. 75/16 April 17, 1975 INDIA RECEIVES $75 MILLION FOR AGltlCULTURAL CREDIT A credit of $75 million from the International Development Association (IDA), an affiliate of the World Bank, will help to finance a two-year program of credit to fanners in India. 'nle credit will support the activities of the Agricultural Refinance Corporation (ARC), an agency established in 1963 to provide medium- and long-te~ finance to co1!11lerc1al and cooperative banka for on- lendi.ng to farmers. The main focus under the project being assisted by • IDA will be on a continuation of the development of minor irrigation to help India to increase its food production, and on staff training to enable the main rural banking institutions to meet more effectively the growing credit needs of the country's agriculture. About $37 million of the IDA credit will be set aside for lending to small farmers who will be able to borrow on preferential te:ins. Access to credit is crucial if the rural smallholder is to make his land more productive. The projett will bring major economic and social benefits to India. The investments in minor irrigation will help to increase annual agd.cultural production., mostly foodgrains, by 895,000 tons valued at $66 million. Over 100,000 fa~ers and their families (a total of about 600,000 persons) will benefit from higher incomes. In terms of institutional development ARC will be further strength- ened, a.nd an intenei,.,rn training program will make the land development banks throughout the country more efficient instruments to expand rural credit.. • /M.Oll Note: Money figures are expressed i.n US dollar equivalents. ' -2- ARC will be responsible for the execution of the project. Since 1970, the Corporation has been the channel for ten IDA credits totalling $320 million for expanding agricultural credit in ten Indian States. The IDA credit to the Government of India • will be for a period of 50 years, including 10 years of grace, It will be intereat free, but a service charge of 3/4 of 1% will be made to cover IDA's adminiatrative cost& • .ARC will channel the funds through land development banks and participating co1111ercial banks to farmers at appropriate terms. -0- • •