Trimming of rural finance for rural development

Dr. Reji Vargheese Mekkaden

GIndian economy is an agricultural economy and real India lies in villages. The importance of the rural banking in the economic development of a country cannot be overlooked. Without an inclusive financial system, poor and vulnerable section of the community and small and petty enterprises would not be in a position to take advantages of growth opportunities. Traditionally, formal financial institutions have avoided or failed to offer sustainable services in rural areas. Thus, informal or semi-formal financial institutions as well as alternative providers like traders or input suppliers have become major providers of financial services. This article throws light on strengths and weaknesses of various financial institutions and role of NABARD for rural development.