BORROWING AND REPAYMENT OF FARM LOANS FROM CO-OPERATIVE BANKS IN THE IRRIGATED AND RAINFED AREAS OF SOLAPUR DISTRICT
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Date
1997
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Mahatma Phule Krishi Vidyapeeth, Rahuri.
Abstract
In this investigation an attempt was made to study
the borrowing and utilization of loans by farmers. It was also
intended to study the repayment and overdues of loans and to
identify the factors associated with the overdues.
The study was undertaken in the developed and
underdeveloped regions of Malshiras tahsil of Solapur
district. The simple random sampling method was used for the
selection of sample. The villages were grouped into two
categories, one having the canal irrigation facilities and it
was designated as developed or irrigated. The other category
consisted of the villages which do not have canal irrigation
facilities and was designated as underdeveloped or rainfed.
From each category, five villages were selected. From each
selected village, 5 farmers each from small, medium and large size groups were selected randomly. Thus the total sample
comprised of 150 farmers. The data were collected by survey
method for the year 1994-95.
The average per holding amount of borrowing in the
developed region was more than three fold than that in the
underdeveloped region. The per hectare borrowings of the
farmers in all the size groups of holding in the developed
region were more than their counterparts in the underdeveloped
region. At the overall level, 91.90 per cent of total loan was
from the institutional sources and this proportion went on
increasing with the increase in size of holding.
Misutilization of short-term and long-term loans
was more in the underdeveloped region than in the developed
region, while the proportion of misutilization of medium-term
loans was more in the developed region.
The proportion of repayment of the principal amount
was more in the developed region than that in the
underdeveloped region. As far as the per hectare amount of
outstanding loans and overdues (including interest) are
concerned, the amount was more in the developed region than
that in the underdeveloped region.
The results of the multiple linear regression
analysis revealed that the amount of overdues in the developed
region was significantly related with the net income from crop production, net income from other than crop production and
amount of loans used for the purpose for which it was taken.
In the case of underdeveloped region, the amount of overdues
was significantly related with the factors like net income
from the sources other than crop production and amount of loan
used for the purpose for which it was taken.
The important reasons for non-repayment reported
by the farmers were low income, non-remunerative prices and
crop failure due to natural calamities.
Low interest rates, concessions in repayment in
case of natural calamities, timely and prompt communication of
amount due and provision of timely finance were some of the
suggestions made by them.
It is felt that there is a need for increasing the
institutional fiance in the underdeveloped region. There
should be proper appraisal of loan proposals, follow up and
supervision after the disbursement of loans. The wilful
defaulters should be forced to repay the loans through proper
action. The commercial banks may also be given statutory power
for recovery of loans on the lines of co-operative banks.
Timely and adequate finance should be provided by linking it
with crop insurance scheme.
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