Recovery Performance of Primary Agriculture Credit Societies in India: An Assessment

Rabin Mazumder (), Chandrasekhar Chakravarty and Amit Kumar Bhandari ()
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Rabin Mazumder: Army Institute of Management, Kolkata
Chandrasekhar Chakravarty: Asia e University
Amit Kumar Bhandari: Rishi Bankim Chandra Evening College

No 8294, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Agricultural credit is one of the most crucial inputs in all agricultural development programmes. Access of rural credit has still remained scarce in India. Primary Agriculture Credit Societies (PACS) working at grass-root level, having direct contact with the rural people and meet their financial requirements. The problem of loan overdue is a serious concern in different regions of the country, as it affects the recycling of funds and loses its economic viability as a lending institution. The present study examines the recovery performance of rural credit given by PACS in six different regions of India namely Central, Northern, Southern, Eastern, North-East and Western. The result suggests that the performance of credit recovery has been low in north-eastern states and high in northern and southern states. Recovery performance of credit is directly proportional to non-agricultural loan to agricultural loan, trained-untrained staff ratio and average member per society and inversely related with proportion of government capital to working capital and real growth rates at constant price. To make all PACS viable and ensure adequate and timely flow of credit, appropriate policies are required from the Reserve Bank of India in collaboration with State Governments.

Keywords: cooperative; credit; loan overdue; recovery; policy (search for similar items in EconPapers)
JEL-codes: E61 F34 G21 Q13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2014-06
New Economics Papers: this item is included in nep-agr, nep-mac and nep-mfd
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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