UTILISATION AND OVERDUES PATTERN OF CO-OPERATIVE SHOT—TERM FINANCE IN VISAKHAPATNAM DISTRICT OF ANDHRA PRADESH.
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Date
1995
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Professor Jayashankar Telangana State Agricultural University
Abstract
Financing agriculture through Co-operative came into existence as early' as in 1904. Among the three types of credit (ST, MT and LT) being provided by the Co—operatives, production credit is the most important one which provides the required working capital as per technical scales of finance. As Visakhapatnanx district was one of the major diS« trict, among North coastal districts for disbursing larger amounts of production credit. It was purposively selected for the present investigation. A two stage stratified random sampling design was used for the selection of three PACS and
90 sample cultivators borrowers. The selection of the socie— ties was purposive and the selection of the respondents from the societies at random. The study was related to the Co— operative year 1994—95. The proportion of borrowers who diverted the loan amount increased with the increase in the farm size. Higher proportions of production credit was productively utilized and was positively related with farm size. Medium and large farmers used the diverted amount for non—agricultural pur‘ poses while small farmers diverted the amount towards COD" sumption purpose. The borrowers from each of the size groups were random~ ly selected at 5 per cent probability proportional to the member (39 small + 29 mediwn + 25 Large). The borrowers were grouped into non—defaulters (28) and defaulters (62). Further the defaulters were classified into ordinary de» faulters (39) and chronic defaulters (23) based on period of default and were again distinguished into non—wilful (39) and wilful (23) defaulters as per the nature of default. Multiple linear regression analysis revealed that the per percentage of irrigated area to total area and quantum of loan borrowed from society, amount of loan taken from other sources found to be significantly influencing amount Of overdues. Amount of overdues were directly related with loan taken from society. and inversely related with percentage of irrigated area among ordinary and chronic defaulters.
The amount of overdues per hectare among ordinary defaulters wasmore in small and medium farmers where as the amount of overdues per hectare among chronic defaulters was. more in large farmers. Scales of finance fixed by DCTC were out of date and were inadequate to the working capital needs of the borrow— ers The ratio of kind and cash components of the sugarcane and paddy crop loan were not only disproportionate but also inadequate. The cost of the Co—operative credit (ST) was very high as equal to interest charged by money lenders in village level. Adequacy and timeliness of the credit were considered to be more Important problems than cost of the credit in acquiring the Co—operative production credit, Quality of the 'kind component of loan was very' poor while its cost was high. Poor yields and net income were the most important reasons for non-repayment of loans. The proportion of wilful defaulters was more among medium and large farmers, while that of non—wilful defaulters were greater in case of small farmers.The proportion of chronic and ordinary defaulters was higher in small and medium farmers as compared to large farmers.
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Citation
D4901