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Last Updated: Wednesday, 27 June 2007, 12:16 GMT 13:16 UK
World Bank loan for India farmers
Indian cotton farmer and his sons at Yavatmal outside Nagpur
Many Indian farmers have been hit hard by debt
The World Bank has approved a $600m (300m) loan aimed at helping millions of poor farmers across India.

Better access to finance for India's rural poor was "absolutely critical", the bank said in a statement.

The money would boost a programme to make thousands of rural co-operative banks responsive to the needs of poor Indian farmers seeking loans, it said.

Thousands of the farmers have committed suicide in recent years, saddled by debts they could not repay.

'Extortionate lenders'

Last year, India's government approved measures worth more than $3bn to refinance the country's ailing co-operative banks so that they could offer cheaper loans to farmers.

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The World Bank said its offer of loan and credit was aimed at transforming farmers' access to financial services.

It said estimates suggested that 87% of marginal farmers and 70% of small farmers in India had no access to credit from a formal financial body, often relying instead on "extortionate money lenders".

"By providing small farmers with improved financial services, such as credit, savings, remittances and insurance, this project will play a significant role in helping India's rural poor benefit from growth opportunities," the bank's country director for India, Isabel Guerrero, said.

Although agriculture makes up just a fifth of India's economy, two-thirds of the population make a living from the land.

The worst-hit states for farmer suicides are Andhra Pradesh, Karnataka, Kerala and Maharashtra.

Estimates for the overall number of deaths among farmers in the four states since 2001 range from 3,600 to 18,000.


SEE ALSO
India's poor villagers wait in hope
01 Feb 06 |  South Asia

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