Credit distribution pattern and repayment capacity of farmers under Primary Agricultural Credit Societies (PACS) in Baloda Bazar District of Chhattisgarh

Abstract

The study investigates the credit distribution pattern and repayment capacity of farmers associated with Primary Agricultural Credit Societies (PACS) in Baloda Bazar district of Chhattisgarh. A sample of 100 farmers from ten PACS was surveyed using a stratified random sampling technique. The findings reveal a strong dominance of short-term loans, with Karmada, Amera and Bhaesela PACS recording the highest disbursements, mainly supporting seasonal Kharif agricultural activities. Medium-term and long-term loans were limited, indicating restricted investment-oriented financing across most PACS. Seasonal loan analysis showed heavy reliance on monsoon-based Kharif credit, while Rabi loans were offered by only four PACS due to irrigation and infrastructural constraints. Repayment assessment indicated that most farmers possessed moderate to strong repayment capacity, with an average Repayment Capacity Ratio (RCR) of 1.39 and a low default rate. Financial viability indicators, including stable net farm income, supplementary non-farm earnings and controlled expenditure, further supported farmers’ ability to meet loan obligations. The study concludes that while PACS effectively support short-term credit needs and maintain satisfactory repayment performance, there is a need to strengthen medium and long-term lending to promote sustainable agricultural growth.