Farmers face credit crunch as PRS loans hit CIBIL scores

Paddy farmers successful the State whitethorn find it progressively hard to unafraid slope loans, arsenic galore of them are facing a caller situation owed to declining CIBIL scores. Their CIBIL scores are falling done nary responsibility of their own, undermining their creditworthiness.

Since the instauration of the PRS (paddy receipt sheet)-based slope indebtedness strategy connected procured paddy, farmers person been experiencing an inadvertent interaction connected their CIBIL scores. Many farmers were unaware that the outgo they received from the authorities for their procured paddy was really disbursed arsenic a loan, with the authorities acting arsenic the guarantor.

“I ne'er had immoderate liability with my bank. But erstwhile I applied for a loan, I was shocked to find that my CIBIL people had dropped to 713 contempt having a important fixed deposit. My people should person been astir 875-900.

“When I checked with the bank, I was amazed to larn that I had supposedly availed a ₹30 lakh indebtedness implicit the past 3 years, with a equilibrium of ₹18 lakh inactive to beryllium repaid. In reality, this was the magnitude for my paddy procurement, treated arsenic a loan, and the government’s hold successful paying the slope caused my CIBIL people to fall,” said Sasidharan P.A., a retired engineer-turned-farmer from Thrissur.

Like Mr. Sasidharan, hundreds of paddy farmers crossed the State are facing the aforesaid problem, and galore of them are unaware of it. “Most farmers volition lone realise the concern erstwhile they attack the slope for a loan,” said Pandiyodu Prabhakaran, wide caput of the Desiya Karshaka Samrakshana Samiti.

K. Muraleedharan, a husbandman from Palakkad, said helium was denied a slope indebtedness successful 2025 for the aforesaid reason. “At first, I did not bargain the bank’s explanation. It was lone erstwhile a person told maine that it was owed to the PRS indebtedness strategy for our procured paddy that I understood and accepted it,” helium said.

Although the State authorities acts arsenic the guarantor for these loans, the method liability rests with the farmers. “From the bank’s perspective, the question is simple: are you a debtor oregon not? If you are considered a debtor, your CIBIL people drops. Almost each paddy farmers are classified arsenic debtors successful this account,” said Mr. Sasidharan.