Growth and disbursement of institutional microcredit to small and marginal farmers in Karnataka

Abstract

Microfinance is a provision of thrift, credit, and other financial services and products of very small amounts to the poor. Self Help Group (SHG) banking is the primary mode of microfinance in India, reaching over six million families. The present study aims to analyze growth in disbursement of institutional microcredit in Karnataka. Secondary data on required information was collected from various published sources. The findings ascertain that growth in SHG’s registered with financial institutions under Bank-Linkage Program was positive and significant in Kalaburagi district (15.19 percent), Kalyana Karnataka region (5.41 percent), State (5.35 percent) and India (13.81 percent) while positive (7.58 percent) and non-significant growth was noticed in Raichur district. The growth in disbursement was 5.41 and 35.97 percent in Raichur and Kalaburagi districts respectively while the growth in outstanding was 15.77 and 29.97 percent. The high rate of interest charged by financial institutions is major constraint in availing microcredit while low farm income is the major constraint faced in repayment of microcredit.