Maharashtra Rural Credit Project (MRCP) – India – Out line of the project features and Impact
General: Access to credit has long been considered a major poverty alleviation strategy in India. A variety of credit-linked programmes supplemented by subsidies have been implemented. The Integrated Rural Development Programme (IRDP) operating since 1978-79 has been a major national rural poverty alleviation programme with a large credit component. Under this programme, nearly 53 million families below poverty line were assisted with bank credit of Rs.31 billion and subsidy of Rs. 10.5 billion upto 31st March 1998, but its impact had not matched the resources spent. This was due to reasons like provision of supply rather than demand-led credit, loans not tailored to meet needs of individual enterprises, lack of aftercare support, weak linkages lack of supervision over loan utilisation etc. Further, there was no effective involvement of the people at any stage of implementation of the programme. As a result, the incidence of high overdues and high transaction cost for the banks in financing the rural poor became a matter of concern for the policy-makers.
Maharashtra Rural Credit Project (MRCP)
Against this backdrop the MRCP supported by IFAD was evolved as an innovative approach to poverty reduction with people’s participation. The strategy for implementation of this project has been devised in such a manner that the rural poor assume centre-stage and their participation ensured at all stages of the project viz. planning, implementation and monitoring. The experience gained shows that once the people’s participation is invoked at the planning stage itself a strong sense of ownership of the project develops among the people which stimulates them to actively involve in the subsequent phases of the project.
The MRCP being implemented with an outlay of US$ 48.35 million is financed by an IFAD loan of US$ 29.2 million supplemented by a contribution of US$ 14.97 million from Government of India/Government of Maharashtra and US$ 1.65 million from participating banks. The Project which is implemented by a number of banking institutions, Government agencies and Non Governmental Organisation (NGOs) since 1994-95 was designed with the principal goal .
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