‘Imperative to increase flow of credit’, says Nagaland CM | MorungExpress

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News Morung Express
Kohima | August 24

The state’s chief minister, Neiphiu Rio, said it was imperative to increase the flow of credit to those who need it to run their businesses and banks needed to do more.

Speaking at Bankers’ Conclave & Credit Outreach program at Capital Cultural Hall, Rio appreciated that through this credit outreach, banks will extend credit of Rs 223 crore under various schemes as well as retail loans to locals from Nagaland.

This, he argued, “will also increase the credit deposit ratio for the state, which hovered around 50%, well below the RBI benchmark of 60%.”

Rio also informed that the state government was able to resolve the issue raised by the banks regarding the implementation of the SARFAESI Act of 2002 in the state to allow them to lend against secured assets. .

To this, he informed that the State Assembly passed a resolution in 2021 after detailed consultations with all stakeholders, including banks, clarifying the implementation of the law in Nagaland.

Rio also thanked the Union Minister of Finance and Corporate Affairs for today launching the Chief Minister’s Micro-Finance Initiative, which was formulated with a view to increasing the drawdown of credit in the priority sectors.

He estimated that through this initiative, credit will be more affordable and accessible to individuals, self-help groups and agricultural producer organizations with additional credit of Rs. 200–Rs. 250Cr disbursed during the year.

“This will further contribute to increasing farmers’ incomes, promoting credit discipline, encouraging private enterprise, and improving the agricultural marketing network and infrastructure in our state.” I am sure that all banks, including private banks, will make effective use of this initiative,” Rio said.

In the meantime, he also pledged to support private banks in their credit outreach activities, to facilitate the expansion of their credit portfolios to assume a greater share of lending to priority sectors.

He also appreciated the North East Small Finance Bank which expressed its intention to provide loans of Rs. 150Cr to small entrepreneurs and farmers, and also open up to 10 branches in the state.

Also speaking, the Chief Secretary, J Alam, recalled that “while much of this event is about credit awareness and access to credit, one should not lose sight of the need to inculcate behavior finance and mobilize national savings Financial literacy is also an essential aspect of financial inclusion.

As the rest of the country moves forward with these technological developments, Alam said Nagaland cannot be left behind. In this regard, he pointed out that a common refrain from the side of bankers is that “lack of proper internet connectivity hampers the provision of banking services in remote and unbanked parts of the state.”

Suggesting an urgent need to have alternative solutions, the Chief Secretary said “it is all the more necessary as the experience of having CBs has not yet had an impact in our State because their limitations cash transport costs are too low”.

Still in the absence of deep postal network penetration in the state, he also stressed the need to find a “viable solution” to provide banking services, especially for DBT payments to beneficiaries in remote locations.

He also urged state banking sectors “to take into account the unique characteristics of the state and infuse innovation into the design of financial products, delivery models and financial education campaigns to meet the needs of the local population in remote areas of the state”.

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