##fi ’ s will have to take initiatives to retool the product design towards garnering new customers and for acquiring more share of the market. mfi ’ s will have to re - engineer the customer responsive processes so as to create a favourable climate for doing business. they will have to revisit their mission and business strategy and reinvent the sector as a community relevant to public and policy support. in the long run, they have to arrive at a firm position on their existence by evolving, either as banks or bcs, or continuing as nbfcs in a niche market. in a nutshell, evidence suggests that poverty reduction strategies are successful in countries which adopt inclusive policies. building inclusive financial systems that are both financially and socially sustainable is a fundamental requirement of any poverty reduction strategy. two basic issues that need to be understood while helping people walk the first mile into financial inclusion are : • financial inclusion programmes should be implemented on commercial lines and not on a charity basis, in order to ensure its sustainability. it is important that banking with the poor is perceived and pursued as a viable business model. • while poor need not be subsidized, it is important to ensure that they are not exploited. the need is to ensure that poor people who deserve credit are provided access to timely and adequate credit in a non - exploitative manner. bis central bankers ’ speeches i am aware of the good work that sa - dhan has done over the past many years. i appreciate the vast and diverse membership of the association and look forward to their contribution in enhancing financial inclusion. i especially look forward to the work of expanding in the poorer districts of india and those that are affected by natural and other disasters, which restrict the presence of banks. given the paucity of financial literacy, i, particularly, am looking forward to high quality awareness building program which will enable the poor households to participate more actively in utilising financial services for their own benefit. i urge upon every stakeholder to contribute towards making our goal of financial inclusion a reality. some of the important areas that require more attention are timely access to affordable financial services including credit, savings, insurance, pension and money transfer, responsible behaviour of the service providers, electronic modes of money handling, livelihood and enterprise creation, and a sound regulatory mechanism that oversees all the above. this requires a complementary and supportive interplay of multiple institutions, channels, models and experiments. i hope that the conference would deliberate upon the above issues and come up with definitive

agriculture in the first half of the 1990s as indicated above began to change with a moderate revival in the second half of the 1990s, and then a steep rise in the first half of 2000s. by 2005 / 06, the ( three - year moving ) average growth in agricultural credit was in double - digits, hovering around 35 per cent per annum [ chart 3 ]. agricultural credit from commercial banks grew significantly faster than that from cooperatives during this period. figures do not add to 100 on account of the share of the rural electrification corporation ( rec ). bis central bankers ’ speeches source : handbook of statistics on indian economy, rbi ( 2010 – 11 ) notes : ( i ) the growth rates presented are three - year moving averages. ( ii ) the wide fluctuations in cooperative credit are on account of variations in indirect agricultural credit from cooperatives. ( iii ) since the data on agricultural credit from cooperatives were available only up to 2007 / 08, growth rates for the years between 2008 / 09 and 2010 / 11 have been estimated using the three - year moving average method. ( v ) commercial banks – growth in agricultural credit and total credit how does commercial bank credit to agriculture compare with aggregate commercial bank credit? notably, growth in commercial bank credit to agriculture, which was lower than the growth in aggregate bank credit during the 1990s, picked up sharply in the first half of the 2000s and largely coincided with the growth in aggregate bank credit. there was a downturn in the growth in commercial bank credit to agriculture after 2005 / 06, when growth in aggregate bank credit also slowed down [ chart 4 ]. source : returns on sectoral deployment of bank credit, database on indian economy, rbi. note : the growth rates presented are three - year moving averages. bis central bankers ’ speeches ( vi ) faster growth of indirect credit to agriculture5 since the second half of the 1990s, indirect credit to agriculture grew faster than direct credit taking the share of indirect credit in total agricultural credit supplied by commercial banks from about 11 per cent in 1995 to 29 per cent by 2011. during the second half of the 2000s, indirect credit even exceeded its prescribed sublimit under the priority sector guidelines by a narrow margin. 6 the rising importance of indirect credit can be interpreted as a reflection of the growing credit needs for strengthening the supply chain infrastructure and the consequent widening of the definition of indirect credit [ chart 5 ]. source : priority sector returns of scheduled commercial banks, rbi. note : in the chart, the sub -