Credit Participation among Rural Households in North Eastern India with special reference to Meghalaya

Abstract

This study is an attempt to examine the status of credit participation among rural households in NER and Meghalaya by using data sources from national surveys like All India Debt and Investment Survey (AIDIS) as well as primary data collected from Meghalaya. These surveys report that the majority of rural households in NER are indebted to institutional sources, mostly banks. Another main finding of the study is that there has been a reduction in the importance of non-institutional sources of credit in the states of the region except in Manipur. Money lenders do not occupy an important place in the rural credit markets of NER as compared to the importance of this source at the national level. Rural and agricultural households of the region have instead relied heavily on friends and relatives for disbursement of credit. In Meghalaya, the rate of participation in rural credit markets is quite low, reasons being lack of awareness and apprehension towards debt. However, household characteristics like gender of head of household, education level of the spouse, main occupation of the household, asset ownership, having a bank account and being a member of any social organization are factors that have been found to be associated with credit participation among rural households in the state.