Credit Delivery Research Articles

A Comprehensive Study of the Credit Delivery Trends and Opportunities in Himachal Pradesh

The study delved into the time series analysis of the existing credit delivery mechanisms and their efficacy in reaching rural, semi-urban and urban areas based on the bank statistics in Himachal Pradesh. The findings indicated a positive growth in financial inclusion, with a significant increase in bank branches and deposit figures over the years. However, bank penetration and credit allocation disparities were evident, particularly in rural areas. Public Sector Banks (PSBs) dominated the banking landscape, while private sector banks showed potential in underbanked regions. The Credit-Deposit (CD) ratio had declined, indicating reduced credit issuance against deposits. The agricultural credit allocation remained relatively low, with a decline in agricultural term loans. The study recommended targeted policy interventions to promote financial inclusion by diversifying financial services in underbanked areas, incentivizing private sector banks to expand into remote regions and strengthening credit infrastructure in priority sectors, particularly agriculture.

EVALUATING NON-PERFORMING ASSETS IN SELF-HELP GROUP-BANK LINKAGE PROGRAMME: ECONOMIC INSIGHTS FROM CENTRAL AND NORTHERN REGIONS OF INDIA

The Self-Help Group Bank Linkage Programme (SHG-BLP) plays a crucial role in providing affordable and timely credit to India’s impoverished and vulnerable populations, who are often excluded from formal credit delivery systems. However, the high incidence of Non-Performing Assets (NPAs) within this sector poses a significant barrier to the continued availability of formal loans, as elevated NPAs disrupt the credit cycle and undermine efforts to alleviate poverty. Historically, the central and northern states of India have recorded NPAs above the national average within the SHG-BLP framework. In this study, we employ multiple linear regression analysis to identify the factors contributing to high NPAs in these regions. Our findings reveal a positive correlation between larger loans and higher NPAs, emphasizing the need for thorough risk assessment and ongoing monitoring when extending substantial credit to SHG members. Additionally, the regression analysis underscores the importance of considering gender dynamics within SHGs. Although women-led SHGs generally perform well, there are inherent credit risks, particularly as both loan size and group size increase. Targeted interventions to support women-led SHGs could enhance repayment rates and reduce NPAs, given that the majority of SHG loans in these regions are managed by female-led groups. KEY WORDS: Non-Performing Asset, Self-Help Group, Bank-Linkage Programme, Loan, Financial Inclusion, Multiple Linear Regression.

Determinants of Credit Constraint among Smallholder Farmers’ Co-Operators in Oyo State, Nigeria

Credit constraint (CC) has been identified as one of the factors that diminish the production efficiency of farmers. Although Multipurpose Cooperative Societies (MCS) have been identified as an avenue to reduce (CC) among farmers, (CC) persists. Thus, the effectiveness of (MCS) in credit delivery and the determinant of (CC) of co-operators were examined. A four-stage sampling procedure was used where Oyo State was purposively selected based on high numbers of registered Agricultural Cooperative Societies. One block was selected from each zone of the four Agricultural Development Project zones. Two cells were randomly selected from each block. Multi-purpose cooperative societies from each of the cells were randomly selected. Co-operators were randomly selected proportionate to size and in all, 200 respondents were randomly selected. Co-operators access credit, inputs, tractors, market information and processed their produce by (MCS). Female co-operators were more credit constraint than their male counterparts. Education, default history farming experience, monthly contributions and dependency ratio were the determinants of credit constraint. Default history has the highest impact in determining credit constraint of co-operators, therefore conscious effort is needed by co-operators to avoid it occurrence. Credits should be made available to farmers through cooperative societies to enhance their efficiency

PERCEIVED EFFECT OF PALM OIL COOPERATIVES IN CREDIT DELIVERY TO MEMBERS IN AKWA IBOM STATE

The study assessed the perceived effect of palm oil cooperatives in credit delivery to members in Akwa Ibom State, Nigeria. Specifically, the study described the socio-economic characteristics of the cooperators, examined the perceived effect of cooperatives on economic activities of members, assessed the benefits members derived from cooperative societies, and examined the challenges faced by the cooperators. Sample size of 201 palm oil cooperators were randomly selected using Taro Yamane formula from the list of palm oil cooperative societies in the study area. Data collected were analyzed using percentages, mean, Pearson product-moment correlation, analysis of variance (ANOVA) and t-test. The finding shows mean age of cooperators was 46.2 years, the majority (69.2%) were female, married (71.6%), a larger portion (97.0%) had formal education. The mean household size, farming experience and annual income were 6 persons, 9 years and N159,145 respectively. The results showed a positive and significant relationship between cooperative societies and the economic activities of members. Also, the cooperative societies benefit their members by having access to loans. Challenges affecting the cooperative were grouped into socio-economic, organizational and institutional problems. The study recommended among others; that the organization seek better strategies of building their capital, more avenues of internally generated revenue should be exploited to improve on their capital formation rates. Moreso, cooperatives should devise better channel of credit delivery to members in terms of the ability to sustain the loan delivery function.

Self-Help Groups and its Future Directions: Evidence from West Bengal

The delivery of credit through Self-Help Groups (SHG) to rural women has had remarkable outcomes, both economically and socially. We articulate findings from our field visit in two rural blocks in West Bengal on the motivation and benefits of being an SHG member and provide suggestions for strengthening the existing programme. While our analyses suggest that the SHG programme has successfully mobilised women from poor economic backgrounds to form groups, it seems a few SHG members were not satisfied with the benefits they expected from the group. At a time when significant emphasis is given to economic inclusion of the disadvantaged sections of society bereft of resources and benefits of formal banking systems, the implementation of suggestions stated by the SHG members can help to promote and strengthen the existing SHG programme in the state of West Bengal, India.

CHALLENGES AND OPPORTUNITIES IN IMPLEMENTING FINANCIAL LITERACY PROGRAMS IN VIRUDHUNAGAR'S RURAL COMMUNITIES

The most vulnerable sections of society are often overlooked by formal financial institutions, driven by the pursuit of profit or the complexities involved in providing capital to these groups. Encouraging financially excluded individuals to engage with the formal financial system, promoting financial literacy, and strengthening credit delivery mechanisms are some of the significant challenges in achieving financial inclusion. An economy's growth is closely tied to how its citizens manage their finances, with the importance of personal savings being equally critical. Financial exclusion occurs when financial services are inaccessible to low-income and marginalized groups. In contrast, financial inclusion—or inclusive financing—refers to the provision of affordable financial services to these underserved populations. Financial inclusion aims to ensure that everyone, regardless of income level, has access to essential financial services. The primary goal of this public policy is to promote universal access to banking and payment services for all. Financial inclusion involves providing low-income and vulnerable populations with timely and affordable financial services when needed. To achieve this, nations must take proactive steps and implement necessary reforms to ensure that the most disadvantaged members of society are not left behind. In India, both the government and the Reserve Bank have historically played pivotal roles in developing banks and other financial infrastructure to enhance financial inclusion and provide high-quality financial products to those currently excluded from the system.

Are the Adivasi Rice Growers of Sub-Himalayan North Bengal Efficient Enough? Role of Machine Learning in Farm Business After COVID-19

The COVID-19 pandemic and the consequent lockdown have disrupted the farming communities across the planet; however, the indigenous communities such as the Adivasi people of tea garden areas in India have been hit hard. It becomes more crucial when we talk about marginalized communities. In India, the Adivasi tribe found in the sub-Himalayan North Bengal cultivates folk rice that needs immediate energy-efficient measures as the production has been increased after receiving the geographical indication tag. Energy efficiency estimation often applied a two-step data envelopment analysis model in agricultural production. However, in most of the previous articles, the applications discussed the factors affecting energy use efficiency with rare studies on efficiency prediction. In this article, first, data envelopment analysis was used to estimate the energy efficiency of rice growers, and in the second stage, extreme gradient boosting, a state-of-the-art machine learning algorithm, was employed to derive the key leading efficiency determinants. The findings revealed wide variation among efficient and inefficient rice growers in the first stage and derived the most salient factors predicting energy efficiency in the second stage. The optimal use of energy inputs combined with effective education, better credit delivery mechanism, arable land availability and years of farming experience provided improvement for the future energy use efficiency of the Adivasi farmers. Further, the novel application of extreme gradient boosting as a machine learning algorithm in energy efficiency evaluation suggests decision-making solutions with a prediction accuracy of 80.91%. Moreover, this study aims to assist future researchers in examining and predicting the key leading determinants to affect energy utilization.

From Cogs to Connectivity: Fintech and the Industrial Revolution of Finance

This article provides an in-depth analysis of the profound impact that financial technology (Fintech) has had on the financing landscape for small and micro enterprises in China. Drawing from the insights of numerous reputable institutions and research findings, it underscores the pivotal role played by Fintech in facilitating the digital transformation of these enterprises. This transformative role encompasses a paradigm shift in credit delivery methods, heightened credit efficiency, and reduced default risks. Furthermore, the article delves into how Fintech actively fosters financial inclusion, leading to positive reforms within the financial market and enhancing the delivery of financial services. Nevertheless, the discussion does not shy away from addressing the potential technological and legal risks that accompany the rapid development of Fintech, particularly the challenges pertaining to network security and regulatory oversight. In essence, Fintech has injected newfound dynamism into China's financial sector while introducing a spectrum of prospective risks. With ongoing technological advancements and regulatory enhancements, Fintech is poised to sustain its pivotal role in China's financial landscape, propelling innovation and advancing financial services.

A Study on Agricultural Loans offered by NABARD to Farmers

This study delves into the comprehensive landscape of agricultural loans disbursed by the National Bank for Agriculture and Rural Development (NABARD) to farmers in India. The research scrutinizes the varied purposes for which these loans are extended, encompassing crop cultivation, animal husbandry, dairy farming, poultry, fisheries, and agro-processing. Emphasizing the different loan types – short-term, medium-term, and long-term – the investigation explores the interest rates associated with each category and evaluates the role of government subsidies in enhancing affordability. Additionally, the study investigates the credit delivery mechanism facilitated by NABARD through cooperative banks, regional rural banks, and commercial banks, ensuring an inclusive approach to reach farmers across diverse strata. The research underscores the technological impetus provided by NABARD, encouraging farmers to adopt modern agricultural practices and technologies. Special attention is given to risk mitigation measures, including crop insurance, designed to shield farmers from losses arising due to unforeseen circumstances. Keywords: NABARD, Agricultural Loans, Farmer Financing, Credit Delivery, Government Subsidies, Rural Development, Risk Mitigation, Financial Inclusion, Technological Adoption, Indian Agriculture.

An Overview of Rural Credit through Public Sector Banks in Karnataka- A Study of State Bank of India in Hassan District

Credit is not only one of the critical inputs in agriculture but also an effective means of overall development of rural economy. A number of agencies such as co-operatives, regional rural banks, commercial banks, self- help groups and a well spread informal credits out lets together constitutes the Indian rural credit delivery system. Rural credit is any type of lending program or line of credit that is aimed at impacting a rural population in some manner. There are banks and co operatives that specialize in extending these types of credit to farmers and others engaged in the agricultural task. Rural credit seen has undergone a major transformation the quality of cultivator’s credit has improved. It has become more and more production oriented and institution biased correspondingly. Individuals have access to rural credit options under certain circumstances. For example, novice farmers and ranchers may be granted a loan or line of credit to manage the acquisition and upgraded of an existing farm operation or the establishment of a new one. Farmers and ranches are sometimes extended credit of this type when some sort of natural disaster has reined crops and threatens the ongoing operation of the branch or farm.

Agrarian Distress and Indebtedness Among Rural Agricultural Households in Uttar Pradesh

Agriculture is the largest sector of the Indian economy in terms of population dependent on it, where more than 85% of farmers belong to small and marginal categories. In India, agriculture has made commendable progress after the Green Revolution, and with a spectacular rise, the country has become self-sufficient in the case of most of the farm products. Despite it, farmers continued to languish in poverty. As time passes, farming has become less remunerative for most of the farming community, which has led to increasing debt and overall distress. Along with this, the consistent crop failure, coupled with the high cost and vagaries of the market, have made life worse for them. According to the latest data released by ‘National Crime Records Bureau (NCRB) on December 4, 2023, there were 11,290 suicide cases reported by farmers from across the country during 2022, with an increase of 3.7% from 2021. In India, more than half of farmers were in debt and as per NCRB data, there were 7034 farmers’ suicide cases due to indebtedness in 2022. Moreover, the state of Uttar Pradesh saw the highest increase in the number of suicides among all states, with a 42.13% rise when compared with 2021. In this context, the present paper examines agrarian distress and suicide among farmers in the country as well as in the state of Uttar Pradesh. The study, primarily based on secondary sources, tries to explore the underlying reasons for rural indebtedness or bankruptcies, whether it is natural, institutional, social, financial, or government policy-led. The paper also suggests some possible solutions, both short-term and medium-term, including coverage of all crops under Minimum Support Price (MSP); improvement of rural credit delivery system through institutional credit agencies; crop insurance coverage; and provision of input subsidies that can mitigate the agrarian distress among farmers.

Assessing the efficacy of cooperative societies in agricultural credit delivery: A comprehensive review in Nigeria

The comprehensive review critically assesses the efficacy of cooperative societies in agricultural credit delivery within the Nigeria context. Agricultural credit is a crucial driver of rural development, and cooperative societies have long been recognized as instrumental channels for its dissemination. The review unfolds against the backdrop of Nigeria’s agricultural landscape, aiming to offer a nuanced understanding of the multifaceted dynamics surrounding the performance of cooperative societies in facilitating credit access for farmers. The analysis spans historical developments to contemporary challenges, unraveling the evolution of cooperative societies in Nigeria and their pivotal role in supporting farmers financially. By examining a spectrum of cooperative models and their implementation, the review delves into the intricacies of credit delivery mechanisms. It evaluates the impact of cooperative societies on agricultural productivity, income generation, and overall rural livelihoods. Challenges inherent in the cooperative credit system are scrutinized, including issues of governance, financial sustainability, and external market influences. Furthermore, the review explores the socio-economic implications of agricultural credit provision through cooperatives, considering factors such as poverty alleviation, gender dynamics and community development. In light of emerging trends and innovation, the review identifies potential areas for improvement and innovation within cooperative societies. This includes the incorporation of digital technologies, novel financial instruments and strategic partnership to enhance the reach and effectiveness of agricultural credit delivery. Ultimately, this review aspires to contribute to the ongoing discourse on agricultural finance in Nigeria, offering insights that can inform policy makers, practitioners and researchers.

Enhancing trust transfer in supply chain finance: a blockchain-based transitive trust model

AbstractArtificial intelligence and blockchain technology have become indispensable in the era of the digital economy, particularly in the field of financial financing. However, when it comes to supply chain finance (SCF), existing models primarily focus on risk identification and credit evaluation, neglecting the critical aspects of trust transfer continuity and reliability within the chain. To address this issue, this paper proposes a blockchain-based transitive trust model for SCF, which ensures seamless trust transfer from core enterprises to bottom suppliers during financing enterprise credit evaluation. The model utilizes multi-layer metrics to calculate the comprehensive trust value of underlying suppliers, serving as the basis for credit delivery. Additionally, the model stores transitive signature receivable warrants on the blockchain and utilizes splittable delivery of warrants to underlying suppliers. The model’s rationality and correctness are verified through experimental analysis, with results demonstrating that the transitive trust model enhances Small and Medium-Sized Enterprises’ (SMEs) trust at the bottom of the supply chain, thus alleviating financing difficulties for SMEs.

Banking regulation and bank credit delivery in selected Sub-Saharan African countries: Symmetric and asymmetric causal linkages

This study aimed to empirically determine the symmetric and asymmetric causal relationship between banking regulation and bank credit delivery using a context of 23 sub-Saharan African countries from 1995 to 2017. The estimated symmetric and asymmetric error correction-based multivariate panel Granger-causality models allowed for both long-run and short-run causal relationships. The results generally supported the existence of long-run symmetric and asymmetric causality between banking regulatory measures, bank credit delivery and two intermittent variables, namely, economic growth and inflation. In the short run, bidirectional symmetric causality existed between banking entry barriers and bank credit delivery, as well as a one-way symmetric causal flow running from bank credit delivery to banking capital regulations. Moreover, positive shocks to bank credit delivery Granger caused negative shocks to banking entry barriers, activity restrictions or capital regulations, while negative shocks to mixing of banking and commerce restrictions Granger caused positive or negative shocks to bank credit delivery. The findings highlight that policymakers should take into consideration not only the symmetric but also the asymmetric causal effects of reforms aimed at enhancing banking regulation and such reforms should be well-targeted and well-designed for them to stimulate bank credit delivery.

Impact of HR Practices on DCCB Bank Chittoor - Performance Appraisal

Cooperatives were the pioneers in the field of rural credit in India. The entire rural credit delivery was more or less a preserve of the cooperative credit institutions from 1904 to 1969, when the nationalization of Commercial Banks and the subsequent emergence of Regional Rural Banks in 1975 heralded the adoption of the Multi Agency Approach to rural lending. Even today, the cooperative credit structure has the largest outreach and delivers credit to the largest numbers of clients in the rural areas in comparison to other institutions, although the quantum of credit delivered is second to commercial banks.

Lending to Priority Sector in India: Some issues of Credit and NPAs of Public and Private Sector Banks

Priority sector lending has been an essentialfeature of India’s credit policy.Priority sector lending has been in use for long, as an instrument to channelize credit to strategic sectors of the economy that have been marginalized by institutionalised credit delivery system. This programme ensures that the necessary bank credit be allocated forstrategically importantsectors of the economy.Priority sector lending was imbibed in the lending policy for the commercial banks in response to shortages of output in agricultural and industrieswhich caused severe imbalances in the economy after the independence and partisan of the country. Hence, the priority sector lending was used as a lively device for directing the credit flow to the neglected entities with a purpose to re-establish sectoral equilibrium. The program requires commercial banks to extend loans to strategic sectors: agriculture, exports, small business, housing, and economically weak sections of the society. Priority sector lending is still relevantfor economies like India as small scale entities have been backbone of our economy being employing the large section of population of the country. The present study is an attempt to analyse the status of credit allocation and NPAs of priority sector lending of public sector banks and private sector banks considering a period of 15 years from 2004-2005 to 2019-2020.

Antimalarial procurement in private-sector pharmaceutical outlets: decision-making complexities and implications for medicine quality in Tanzania

Poor-quality medicines are a major threat to healthcare provision in low-income countries. The problem exacerbates disease vulnerabilities of already disadvantaged populations including children, women, and the elderly. However, while the...

Assessment of Livelihood Activities of Beneficiaries of Village Alive Development Initiative, Kwara State, Nigeria

The study assessed the livelihood activities of beneficiaries of Village Alive Development Initiative (VADI) in Kwara State, Nigeria. It specifically identified the types of livelihood of beneficiaries in the study area and assessed how the programme benefited rural communities. Data were collected using structured questionnaire administered to fifty-seven beneficiaries using three-stage sampling technique. Data generated were analyzed with descriptive and inferential statistical tools. The study revealed that the age bracket is uniformly distributed across the age groups with greater proportion (37.78%) of the respondents’ ages falling within the age bracket of above 56years.Majority of the respondents were married (91.11%) and educational exposure (84.4%). Also, about 25% (11) of the respondents earned less than ₦100,000 annually and (77.27%) made use of their personal savings to run their enterprises. The majority of farmers engaged in crop production (77.27%) and plant grains (57.14%) as their major crop produce. Also, majority (72.09%) of the Community farmers had no access to credit facilities and nearly half of the respondents (46.51%) did not practice record keeping. The study further showed that majority (56.1%) adopted the banking savings as their preferred mode of saving and (83.33%) do not belong to any existing groups and cooperatives. (64%) had never participated in any agricultural and rural development project. The study found out that access to credit facilities was the major interest of communities and existing groups were not strong enough to control market or operate as pressure group to influence access to credit facilities. Thus, the study recommends a simple and functional micro credit delivery system to the farmers in order to enable them access loan for their businesses, there should be awareness of the project in order to increase and strengthen their livelihood activities.

Influence of Joint Liability on Enterprise Development of Rural Women in Nyamache Sub-County, Kisii County, Kenya

Group lending has received great attention from economists and policymakers for its successful credit delivery to poor borrowers and its role in alleviating poverty in developing countries. The success of group lending in providing credit to poor borrowers has been attributed to its ability to mitigate the asymmetry of information and enforcement problems in credit markets. The ability of group lending institutions to overcome the asymmetry of information and enforcement problems has been theorised to be the driving force behind their outreach to the poor, their sustainability, and their repayment performance. While there is a host of theoretical models explaining the success of group lending, empirical research has lagged behind. The focus of this study was to explore the determinants of group lending mechanisms on the enterprise development of rural women in the Nyamache sub-county, Kenya. The study targeted the rural women development groups that access loans as a group within Nyamache Sub-County. The total target population comprised 781 members, and by using Krejcie and Morgan’s table of determining sample size, the sample size consisted of 260 respondents. Questionnaires were used. The questionnaires were edited first for accuracy and completeness. The study used frequency distribution and percentages and computer software-Statistical Package for Social Scientists version 22 (SPSS v 22) as a tool for analysing data and establishing relationships between variables. The study established that joint liability, training, group representation and loan size positively and significantly influenced enterprise development

Effect of Microcredit on Welfare of Rural Households in Oyo State, Nigeria

The impact of microcredit on the livelihoods of poor rural households and its contribution to the socioeconomic development of the poor cannot be underestimated. This study investigated the effect of microcredit on rural households irrespective of the enterprises engaged. Primary data was collected through semi-structured questionnaires. A total of one hundred and fifty rural household heads were interviewed using a multi-stage sampling technique to select the respondents and only 134 (89.33%) questionnaires were used for the analysis. The data collected were analyzed using descriptive statistics, Mean Per Capita Household Expenditure (MPCHE), and ordered logistic regression models. The results of findings showed that 57.46% of the respondents were males, 82.84% were married and 67.91% were literate. The mean of age, household size, and years of formal education were 38.9years, 6.22, and 9.59years respectively. The findings further revealed that household size (Pα0.5), years of formal education (Pα0.1), years of experience (Pα0.1), the interest charged on the credit (Pα0.0a 5), the time lag of credit delivery (Pα0.05), payback period (Pα0.01), and distance to credit source (Pα0.1) were significant to microcredit access in the study area. The ordered logit result revealed that distance to credit source and household total expenditure were significant to welfare level at Pα0.1 and Pα0.01 respectively however, household size and amount borrowed are negatively correlated to welfare level and significant at Pα0.01 and Pα0.1 respectively. The Mean Per Capita Household Expenditure (MPCHE) was N7064.14 with a welfare line of N709.36 and the welfare categories are low (18.66%), average (41.04%), and high (40.30%). It is therefore recommended that the payback period should be extended to allow ease of repayment with low-interest rates and the means of accessing credit should be improved so that more households could benefit. Also, the government should intensify efforts toward education beyond the primary level among rural households.