Govt, World Bank sign US$100m deal on rural economy

The agreement involving India’s Central Government, the State Government of Tamil Nadu and the World Bank will fund rural enterprises and create employment opportunities for youth, particularly women

January 30, 2018

The US$100 million loan programme from the International Bank for Reconstruction and Development (IBRD), has a five-year grace period, and a maturity of period 19 years

The project will build on several rural livelihoods programs in India as well as the successes of the recently closed Tamil Nadu Empowerment and Poverty Reduction Project

It will specifically target at least 60 per cent women entrepreneurs from the SHG network in Tamil Nadu who have the potential to move to the next level of economic integration

An e-governance platform using information and communication technology and a robust management Information system will help monitor and track results real time.

India’s Central Government, the State Government of Tamil Nadu and the World Bank have entered into a loan agreement to promote rural enterprises, facilitate their access to finance, and create employment opportunities for youth, particularly women entrepreneurs. The deal announced on January 30th will provide support of US$100 million in 120 blocks of Tamil Nadu covering nearly 4,000 villages across the state’s 26 districts, directly benefiting over 410,000 people. The Tamil Nadu Rural Transformation Project (TNRTP) has been built on preliminary market studies and aims to create an enabling environment for producers and enterprises to promote businesses across select value chains.

The collaboration comes as part of the Indian’s objective to help create an enabling environment of institutional reforms, policies and investments which are key to a speedy and inclusive rural transformation. The project will help communities to identify commodities and subsectors in the value chain for preparing business plans. Around 30 per cent of the financing for these business plans will be through a matching grant program from the project and the remaining 70 per cent will be leveraged from other financial institutions. The project will be of particular help to eligible households from socially and culturally disadvantaged groups that are already part of self-help groups (SHGs).

The initiative will promote participation in lucrative sectors such as garment manufacturing, food processing, traditional healthcare, eco-tourism and businesses around creative industries. Selected innovations and startup ideas, that can potentially augment rural economic growth in Tamil Nadu, will be tested or scaled up under a newly created platform known as the Tamil Nadu Rural Transformation Marketplace. The project will be rolled out in a phases – 26 blocks will be taken up for implementation in all project districts in the first eight months, followed by 52 blocks by the end of 12 months, and the remaining 42 blocks by the end of 18 months from initiation of project implementation.

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