Economic Analysis of Agricultural Loans from Private Sources in Maharashtra

Abstract

The present exercise was carried out to study the pattern of loan acquisition from private agencies and its magnitude, the cost of loan acquisition from non-institutional agencies and overdues of such loans in Maharashtra. The major findings of the study are the share of scheduled commercial banks has increased and the share of co-operative bank has reduced within 26 years in agriculture loan. It is bad indicator that the loan outstanding and loan overdues were increased within 26 years lead to rural indebtedness. Institutional agencies were not able to satisfy consumption and social needs of farmers so they requires private loan by money lenders, traders, friends, relatives, etc. with high interest. In case of private, loan maximum loan acquired from the money lenders, in case of private agencies, the per cent gap was highest for medium farmers. Money lenders were more liberal to sanction the private loan requirement of farmers, The cost on items like stamp duty, processing fee and other sundry expenses incurred were higher in overall farmers and The private loan overdues were higher in case of small size group farmers. Majority of the farmers have taken loan from money lenders. Therefore, it is necessary that the farmers should make some investment on other subsidiary occupations like dairy, poultry, sericulture, mushroom production and the likes which will be helpful for generation of income and employment and thereby increasing their own equity/funds for the developmental activities. The extension and financing agencies have to play an important role in convincing the farmers in this regard and while framing the credit policy, the financial institutions should give more emphasis on small farmers and their credit need.