Rural Credit Case Study

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Raveesh (2011) has attempted to analyze the relationship between bank credit and economic growth in North-East region consisting of seven states and observed that banks has provided significant amount of money but there has not much impact on the economic growth causing the region towards further backwardness.
. Rao (2008) in his study on rural credit has discussed some of the lively issues of rural credit in India, that are; the increasing substitution of capital for labour in agriculture due to diversion of cheap credit for bigger farmers by commercial banks, significant slowing down in the share of the short-term loans in relation to the share of fertilizers in the eastern and western states despite …show more content…

He found that, while the state has experienced a steady growth in the supply of formal sector credit over the 1980s, the level of disbursement has remained lower as compared to the all India level and also low in relation to the demand for rural credit in the state. In the 1990s, there was a sharp decline in the volume of credit disbursement by commercial banks in the rural West Bengal; however, village level survey showed a substantial increase in the disbursement through cooperative society during the same period and emergence of agricultural traders as a main source of credit for operational expenses of cultivation. The author has revealed that the process of land reform and with the distribution of land and the registration of bargadarsa, has made a large number of cultivators formally credit-worthy and eligible for cultivation loans; and the involvement of panchayats in the process of formal lending has made substantial progress in the recovery of loans …show more content…

6235 in Kerala, Rs. 5,502 in Tamil Nadu, Rs. 3,806 in Punjab and Rs. 3428 in Andhra Pradesh while it was as low as Rs. 873 in Uttar Pradesh, Rs. 432 in West Bengal and only Rs. 155 in Bihar in 1999-2000 respectively; wide variation in the number, proportion and per farmer loan of indebted farmers across the states and union territories in India have been found as states with high level of agricultural development and with commercial farming were reporting high level of indebtedness among the

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