Posts Tagged ‘India Drought’

Natural Disasters in Southeast Asia

Wednesday, September 9th, 2009

Natural disasters continue to devastate smaller enterprises in the emerging market countries, where underdeveloped insurance markets do not provide an adequate safety net. A powerful earthquake struck Indonesia’s main island of Java where the capital city Jakarta is located, causing major destruction. In India, where the summer rainfall was 25% less than normal, the driest spell in nearly 40 years, prices of food from recently-harvested crops have risen by 14.5%. The State Bank of India has responded with a drought relief package, including cuts on lending rates for farms and rural producers. The Bank reduced crop loan interest rates from 11.75 – 12.75% floating rates to 10% fixed. The Bank cut loan rates on irrigation programs from 10.50 – 13.25% to 8 – 9%. Both reduced rates remain in effect through March 2010, with an extra percentage point reduction on interest rates offered for timely repayment.