Role of micro finance in agricultural development: A case study of Tumkur District

Raghu. C

Role of micro finance in agricultural development: A case study of Tumkur District

Authors: Raghu. C

Unique Paper ID: 167659
Volume: 3
Issue: 3
PageNo: 372-378

Keywords: Agriculture Credit facilities Loan distress Institutionalization Farm credit.

Abstract:
Credit is an essential input for the growth of the any country. For varied reasons, Indian farming community is not successful in making enormous investments in agriculture. There is a proverb which says “Indian farmer takes birth in debt, lives in debt, and dies in debt”. In order to ease the problems of farming community, Indian Cooperative Societies Act was approved in 1904. A number of credit cooperatives were started under this Act, which provided institutional support to farmers for short, medium and long term purposes. Consequently, tiers at state and district levels were too conceived to strengthen these credit cooperatives. Apart from these cooperative institutions, nationalization of commercial banks and introduction of regional rural banks also helped in increasing credit supply to the farmers of the country. Despite this, the institutional financing agencies have failed, to a large extent, to meet the necessities of the farmers. Some of the factors responsible for their failure are insufficient supply of credit, poor recovery, demand-supply gaps, interference by politicians, lack of monitoring, misutilisation of credit, problems in identification of target group, high transaction costs and lags in time, natural calamities and above all, presence and competition from informal credit agencies. A number of committees have been constituted by Government of India looked into their functioning and made numerous recommendations to progress their health and execution. Of the total credit provided by these institutions 44% was met by cooperative banks and 48% by commercial banks leaving a miserable amount by regional rural banks (Annual report, Reserve Bank of India, 2016). Till date, these institutions are catering to about 60% of the total credit necessities of the farmers in rural areas of the country. This paper analyses the role of micro finance institutions in promoting agricultural growth.

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ISSN: 2349-6002
Volume: 3
Issue: 3
PageNo: 372-378

Role of micro finance in agricultural development: A case study of Tumkur District

Available:https://ijirt.org/Article?manuscript=167659

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