The scheme would be formally announced shortly, Nabard chairperson Ranjana Kumar said on the sidelines of the second day of Bancon 2005 in Kolkata.
The scheme would boost credit flow to small and marginal farmers by the banking sector at a cheaper rate. Under the scheme, Nabard would encourage banks to lend more to the weaker segment of the agriculture sector at a lower interest rate.
Kumar said, the entire fund would be provided by the government and Nabard was in advanced talks with concerned departments.
The government has agreed in principal to the scheme and finer details were being worked out. The government would provide the corpus depending on the need.
The scheme is part of the government emphasis on the agricultural sector with special focus on small and weak farmers. The lending interest rate was expected to be around 5 and 5.5 per cent. The ceiling of the rate was 9 nine per cent.
Speaking about micro-finance, Kumar said currently the fund for it was Rs 100 crore (Rs 1 billion). Another Rs 100 crore has been earmarked for participating in the Microcredit Financial Institutions capital.
