‘Lenders to get plethora of opportunities in rural areas’
Increasing income levels and shifting consumption pattern in rural areas is expected to provide a plethora of opportunities to lenders and industries, said Corporation Bank General Manager B R Bhat delivering the keynote address at the UGC sponsored conference on ‘Banking towards strengthening rural India- New paradigms and directions’ organised by the Association of Mangalore University College Teachers (AMUCT) at Subrahmanya.
Bhat said that the rural India represents a large and fast-growing market for many goods and services. The rural consumption market is likely to reach $ 600 billion by 2020, from the current level of $ 190 billion, he said. Out of the six lakh habitations in the country, only about 30,000 habitations have a commercial bank branch, he revealed.
Stating that it is difficult for the banks to expand in all areas of rural India because of various infrastructure problems, he said they should tap the reach of mobile services to provide value-added services.
On challenges of providing credit in rural areas, he said the supply of formal credit to rural areas is inadequate. Added to this, credit market in rural areas is imperfect and fragmented.
With this, the distribution of formal sector credit in rural areas has been unequal, he added.
He also informed that RBI has mandated the existing banks to open 25 per cent of new branches in un-banked rural centers. It has asked to cover all villages with population above 2000 by March 2012, above 1000 and below 2000 by Mar 2013 and the remaining villages thereafter, ultimately covering all 6,00,000 villages, he said.
