A study on direct credit flow in agriculture and allied activities

Abstract

Access to finance is critical for the growth of agriculture. Increase in credit enables the farmers to use inputs on time and in desired quantity. The study analyzed the flow of direct institutional credit in - agriculture & allied activities both short & long term and in different lending agency based on secondary data. The period of study was from 1970-71 to 2016-17. The analysis revealed that the growth rate of direct credit flow in agriculture was 15 percent in the study period indicating continuous increase in direct credit. Analysis of direct credit flow in lending agencies for a period of 2000-01 to 2016-17 revealed that the growth rate was 24 percent in case of regional rural banks and 23 percent for commercial banks indicating increase in coverage of institutional loan. This study indicates that the credit flow for direct loans has increased and the trend should be continued.