India, World Bank sign $250 million agreement to boost rural income
The Indian Government has signed a $250 million loan agreement with the World Bank for the National Rural Economic Transformation Project that aims to promote women-owned and women-led farm and non-farm enterprises across value chains.
The Indian Government on March 5, 2019 signed a $250 million loan agreement with the World Bank for the National Rural Economic Transformation Project (NRETP) that aims to help women in rural households shift to a new generation of economic initiatives by developing viable enterprise for farm and non-farm products.
The loan agreement was signed by Additional Secretary Sameer Kumar Khare on behalf of India and World Bank’s Acting Country Director Hisham Abdo.
The main focus of the new project will be to promote women-owned and women-led farm and non-farm enterprises across value chains and enable them to build businesses that help them access finance, markets and networks and generate employment.
• The National Rural Economic Transformation project is additional financing to the $500 million National Rural Livelihoods Project (NRLP) approved by the World Bank in July 2011.
• The NRLP, which is currently being implemented across 13 states, 162 districts and 575 blocks, has managed to mobilise more than 8.8 million women from poor rural households into 750,000 self-help groups (SHGs).
• These SHGs have been further federated into 48,700 village organisations and 2900 cluster and gram panchayat-level federations.
• While these 13 states will continue to be supported under the new NRETP project, 125 new districts will be added from within these states.
• The National Rural Livelihoods Mission aims to alleviate rural poverty and create sustainable livelihood opportunities in rural communities by promoting sustainable community-based institutions which will facilitate economic and financial services for the rural poor.
• The $250 million loan agreement has a 5-year grace period and a final maturity of 20 years.
The additional funding will help give impetus to the poverty alleviation measures by the government and ensure equitable and inclusive growth in the country.
The project will support enterprise development programs for rural poor women and youth by creating a platform to access finance including start-up financing options to build their individual or collectively owned and managed enterprises.
The project will involve developing financial products using digital financial services to help small producer collectives scale-up and engage with the market.
It will also support youth skills development, in coordination with the Deen Dayal Upadhyaya Grameen Kaushalya Yojana.
Besides this, peer to peer learning across states and communities, which was a successful strategy under the NRLP, will continue to be used under this project.
The project will also continue to give technical assistance, skills building and investment support to strengthen women-owned and women-led producer collectives diversify into high-value farm and non-farm commodities such as commercial crops and livestock products and fisheries.
Since its launch in 2011, the National Rural Livelihoods Mission has mobilised 50 million poor rural women into self-help groups and their higher-level federations. These groups have leveraged nearly $30 billion from commercial banks.
Many of these women are now geared towards moving into higher order economic initiatives in farm and non-farm sectors.
The new project will now help them engage purposefully in an evolving rural economy.