LOAN PURCHASE AND UTILIZATION BEHAVIOUR OF FARMERS IN A CREDIT COOPERATIVE SET-UP: A CASE STUDY OF GUJARAT STATE CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD. (KHETI BANK)

Abstract

Rural Co-operative credit system provide various loans to farmers for the improvement of their livelihood. The banks consider many parameters before sanctioning a loan to the farmers. Land holding is an important consideration while sanctioning an agriculture loan to a farmer, besides other parameters. Among the regular loan borrowers, it is better to understand their behaviour in terms of their land holdings. A primary research survey was conducted among 450 regular loan borrowers of The Gujarat State Co-Operative Agricultural & Rural Development Bank Ltd. (GSCARDB), from three different regions of Gujarat State covering six districts. Descriptive analysis, Chi-Square test, Correlation analysis and Analysis of Variance (ANOVA) are carried out to understand the differences among the farmers in terms of their land ownership. The study findings shows that medium and large farmers segments are better aware of working of GSCARD bank. Majority of marginal farmers have borrowed the agricultural loan multiple times. Good and very good ratings on the loan services of GSCARD bank are more seen from large farmers segment. Majority from marginal, small and medium segments are 'satisfied' while majority from large farmers are 'high satisfied' with GSCARD bank. There is a significant difference among the four farmer segments in terms of average loan amount taken. Strong relationship exists among large farmers on their rating of loan services and satisfaction level. Banks perform many checks on a loan seeker before sanctioning a loan. Even then, there are loan defaulters who do not pay the loan instalments for a long time. This study aimed to understand their profile and behaviour. This study finding are based on the survey conducted among 150 loan defaulters of The Gujarat State Co-Operative Agricultural & Rural Development Bank Ltd. (GSCARDB), from three different regions of Gujarat. This study was conducted in six districts of Gujarat State. Descriptive analysis, correlation analysis, Chi-Square test and Analysis of Variance (ANOVA) are carried out. The study finding concludes that most loan defaulters are >45 years of age having more years of experience in agriculture. They have not gone through any kind of special training. They have taken loan for a medium to long term period (3 to 5 years and more). It is further observed that age, experience in agriculture, income per annum and number of times loan borrowed have no significant impact on the loan overdue amount. The loan defaulters from the three regions of Gujarat State behave similarly with no significant difference in terms of their opinion on overall loan services rating of the GSCARD bank.