Rural Credit In India Research Articles

Determinants of rural credit in India: evidence from a large-scale sample survey

Determinants of rural credit in India: evidence from a large-scale sample survey

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.

Assessing the Use of Land as Collateral for Accessing Credit from Institutional Sources in Rural India

Data on access to credit in rural India are mostly available from periodic largescale surveys and some primary research in different parts of India. The growth of institutional sources of credit was quite dramatic during the first four decades after Independence. There appears to have been a regression since then. There is some evidence to show that land as collateral is a frequent requirement for institutional lenders. There is also some scattered evidence that land is more likely to be used as collateral by larger landholders and a clear title favours extension of loans. However, there are very little data on the extent to which these hypotheses hold well across states. Textual records (copies of Record of Rights) gathered for the construction of the NCAER Land Records and Services Index 2020 offered an opportunity to understand the situation in different states with respect to the issues mentioned above. This article assesses the data gathered for six Indian states/Union Territories (UTs): Chhattisgarh, Gujarat, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh and Uttarakhand. The article highlights the extent to which various hypotheses prevalent in the literature are borne out by the evidence obtained through the sample data gathered for the states/UTs that are the subject of this article. While adding to the knowledge on the subject, it will help enhance an understanding of both the subject and policy making in the area of rural credit.

What Determines the Availability of Formal Agricultural Bank Credit in Rural India? A Macro Perspective

The central organising theme of this paper is the study of the factors that determine the availability of formal agricultural credit to rural households in India for the period 1991-92 to 2018-19. Grounded in economic theory, this work proposes a model of the determinants of the availability and access to formal agricultural bank credit in India by accounting for both the underlying demand and supply functions of the aggregate formal credit market of Indian agriculture. The study uses an Ordinary Least Squares framework to analyse the issue under consideration while carefully framing the estimated model in terms of the underlying theory, its econometric properties and the policy robustness of estimated results. The study finds that active policy interventions on the demand side of the agricultural credit market in India are the urgent need of the hour if the objectives of financial inclusion and inclusive development are to be achieved in spirit and action. This is the case because the availability of formal bank credit to agricultural borrowers is found to be largely driven by factors that directly affect the demand for credit rather than its supply. With an already well-regulated allocation and distribution environment for agricultural credit in India, it is now the demand-side forces that require active policy disruptions and innovations.

Determinants of Demand for Formal Agricultural Credit in Rural India

Determinants of Demand for Formal Agricultural Credit in Rural India

Micro Credit in Rural India with Reference to Poverty Reduction and Women Empowerment

Micro Credit in Rural India with Reference to Poverty Reduction and Women Empowerment

Dynamics of Access to Rural Credit in India: Patterns and Determinants

The study has analysed the changes in structure of rural credit delivery and inclusiveness of rural credit flow across states and social groups, along with identification of factors that influence the choice of credit source. The study is based on the unit level data of Debt and Investment Survey carried out by NSSO during 1992 (48th round), 2003 (59th round) and 2013 (70th round). The structure of credit system has been assessed in terms of access of rural households to different credit outlets, share of formal credit institutions, availability of credit, and interest rate. The determinants of rural households’ choice for credit sources have also been studied. The study has found that the structure of credit market has changed over time and the share of institutional credit has increased. The initiatives taken by the government have paid off and the flow of institutional credit to rural areas has increased significantly even in real terms. The indicators of financial inclusion have shown a sign of improvement. However, regional disparity and presence of informal agencies in the disbursement of rural credit is still persistent. Rural households’ access to institutional credit is influenced by a number of socio-economic, institutional and policy factors. In our analysis, the education, caste affiliation, gender and assets ownership have been found to influence the rural households’ access to institutional credit significantly. A concerted effort and appropriate policy reform are required to make rural households’ access to institutional credit neutral to caste, class and regions.

Institutional Credit and Rural Development: A Case Study of Dasarathpur Block of Jajpur District, Odisha

This paper is an attempt for illuminating an unexplored area in the field of institutional credit by different Banking and Non-Banking sector. This study highlighted the credit system of rural development; requirement of credit in rural India also the author highlighted the agricultural development after independence. After nationalization of commercial Banks in 1969 how commercial Banks endeavored to increase direct investment, how the new strategy called service area approach was introduced to increase productivity and income levels of rural people. The primary aim of this study are (I) to examine the credit performances of co-operatives, commercial Banks and RRB's in meeting the credit requirement. (II) To investigate the amount of loans sanctioned for disbursement purpose. (III) To find out the repayment and over dues of Bank credit.

Role of Regional Rural Banks Finance to Weaker Sections of the Rural Society in India

The importance of the rural banking in the economic development of a country cannot be overlooked. Since 1975 RRBs are being regarded as one of most important sources of institutional financing of rural credit in India. The Regional Rural Banks (RRBs) were established with a view to developing the rural economy by providing, for the purpose of development of agriculture, trade, commerce, industry and other productive activities to the rural areas credit and other facilities, particularly to the small and marginal farmers, agricultural laboures, small entrepreneurs and rural artisans. The objective of this paper is analyzing the rural credit to the weaker sections and the role played by the RRBs in the priority and non priority sector landings. The study is analytical and exploratory in nature and makes use of secondary data.

The “Moral Hazards” of Microfinance: Restructuring Rural Credit in India

Abstract: This paper explores how economic ideas are produced, how they travel, and how they are contested, in complex and contingent ways, in particular places. It stems from events that took place in coastal Andhra Pradesh, India, where I conducted fieldwork on microfinance programs during 2007. I begin by tracing how the practices of microfinance—and the ideas and rationalities underpinning them—have been increasingly globalized as a development tool since the 1970s. I then move on to describe the proliferation of various microfinance programs across Andhra Pradesh over the last decade. In the closing section, I consider the implications of a recent protest that took place against commercial microfinance institutions in the region.

Access to Credit as Insurance

One main advantage of having developed credit markets is that there are better opportunities of dealing with risk. This paper measures access to credit in rural India and the role of credit institutions as insurance mechanisms. I am able to do this by comparing data for 720 rural households that I collected from two Indian states, Kerala and Uttar Pradesh. To measure a household's access to credit, I develop an equilibrium model of sorting based on a random utility approach. The initial results indicate that there are large disparities in access to credit, particularly from formal sources. The predominant sources of credit, however, are cooperative societies and informal ties between households. The main results indicate that access to credit serves as an insurance against idiosyncratic income shocks. This, however, crucially depends on the exact source of credit. While access to banks does not provide insurance against an income shock, access to cooperative societies and informal ties offer the best insurance against such shocks. Households that primarily rely on moneylenders for credit are the worst hit during an income shock. The results show that a 1 percent increase in access to cooperative, lowers the probability of reducing consumption expenditure against an income shock by 18 percent.

Household sectoral choice and effective demand for rural credit in India

An analysis of the ICRISAT data from three Indian villages raises concern about the extent of rationing mechanism inhibiting the spread of formal credit in rural India where a significant proportion of households do not have any outstanding loan or borrow from the informal sector only. A limited-dependent econometric analysis of the factors jointly determining household sectoral choice and effective demand for informal loan conditional on whether a formal loan is available suggests that compared to formal loan easy and adequate access and prompt recovery are significant determinants of the popularity and viability of informal rural credit among sample households; also some households substitute labour income to ease the extent of credit. Thus, rationing of the formal credit is not the only factor inhibiting the spread of formal credit in the study villages.