Part A: banks Survey Introductionshodhganga.inflibnet.ac.in/bitstream/10603/38509/12... ·...

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Part A: banks Survey

Introduction

In this chapter as part deals with the agricultural credit, role and

performance of commercial and cooperative banks in the undivided Gulbarga

district. Hence, I have selected the State Bank of Hyderabad (SBH) among

commercial bank and Primary Agricultural Credit Societies (PACs) among

Cooperative banks. SBH has the largest number of branches in undivided

Gulbarga (36 branches) followed by SBI (lead bank) with 32 branches. The total

numbers of branches of SBH add up to 36. And PACs function at the village

level. They lend loans to small and marginal farmers at lower rate of interest

when compared SBH or total commercial banks. They give loan for small and

marginal farmers.

The commercial and cooperative societies are main sources in giving

loans to farmers. The comparative study of the functions, performance of the

PACs and SBH in undivided Gulbarga district is done. This part A also deals the

flow of agricultural credit, recovery and some problems or given to agricultural

sector.

Selection of the sample banks

The district is served by many branches of SBH which was established in

1956. Hence I have taken 3 Branches of SBH and one branch of Canara Bank

and nine added to it are the PACs.

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Table 6.1.1: Selection of the sample banks

Sl. No Types of banks/ societies Place Taluks

1 PACs Miryan Chincholi

2 PACs Ainapur Chincholi

3 PACs Polaka palli Chincholi

4 PACs Vibhutuhalli Shahapur

5 PACs Katamanhalli Shahapur

6 PACs Shahapur rural Shahapur

7 PACs Aurad Gulbarga

8 PACs Kurikota Gulbarga

9 PACs Kamalapur Gulbarga

10 SBH Chincholi hincholi

11 SBH Shahapur Shahapur

12 SBH Gulbarga Gulbarga

13 Canara bank Kamalapur Gulbarga

Total 13 banks

The above table shows selection of 3 taluks for my study namely Chincholi,

Shahapur, and Gulbarga. And from each taluk 3 societies and SBH branch has

been selected exception being, Gulbarga taluk where 3 branches of SBH and 1

Canara Bank branch has been chosen. The reason being is that kamalapur

village comes under Canara bank and not SBH. Selected villages are coming

under commercial and cooperative banks (PACs and SBH)

Financing banks

From the observation made, it could be found that Primary agricultural

credit societies are not financially self relief. Most of them are financed by

district central cooperative banks, while some of them financed by commercial

banks to which they have been attached under a special scheme. SBH’s rural

branches function only in places where cooperative societies are absent. But in

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practice, credits institutions operate in place where cooperative are also present.

SBH raises funds, through peoples deposits. It is further used in business

transaction of the bank. If need arises the two banks seek the help of NABARD

also.

Area of operation ( villages coverage )

Increase in the area of operations by rural credit institutions is one of the

factors determining their viability. The question of number of village and

population to be served by a cooperative has been given considerable attention

by various committees. The All India Rural Credit Survey Committee found

that the formula of ―one village one society‖ has failed and it recommended the

reorganization of PACs, into larger societies, each covering groups of villages

with a reasonably large membership and a reasonable adequate share capital so,

as to provide it with adequate business.

Table 6.1.2: no. of villages covered by sample banks

Sl. No Name of institutions No. of villages

Cooperative banks (PACs)

1 PACs in Miryan 7

2 PACs in Ainapur 7

3 PACs in polakpalli 10

4 PACs in vibhutihalii 6

5 PACs katamanhalli 5

6 PACs in sahapur rural 8

7 PACs in aurad 8

8 PACs in kurikota 9

9 PACs in kamalapur 10

Commercial banks (SBH and canara bank)

10 SBH in chincholi 25

11 SBH in shahapur 29

12 SBH in gulbarga 32

13 Canara bank in Kamalapur 25

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Coverage of population

The analysis of population coverage of sample rural credit institutional shows

that in Gulbarga district. PACs covers a population of about 3000 to 15.000. But

commercial banks (SBH and Canara banks) cover the population of 15.000 to

25.000. So, the population coverage of commercial banks is larger then PACs.

Commercial banks have coverage of villages more then 20.

Table .6.1.3: population under the sample banks

Categoties of population No. of PACs No. of SBH

Up to 5000

5000 to 13000 -

13000 to 25000

Membership

PACs and SBH adopt the policies of open membership and are expected

to admit all those who are in need of their services. In 1956, the average

membership per society was as low 46. For the first time the All India Rural

Credit Survey Committee in its report (1954) stressed the need for increasing the

membership in credit societies. As per its recommendation Government

sanctioned loans for share capital to the weaker section of the rural population in

order to enable them to become members in PACs. As a result there has been an

increase in the membership.

Table 6.1.4: growth of membership in sample banks

Sl. No Name of the institutions 2009 2010 2011

1 PACs in Miryan

2 PACs in Ainapur 3032

3 PACs in polakpalli

4 PACs in Vibhutihalii 663 677 659

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5 PACs Katamanhalli 676 708 782

6 PACs in Shahapur rural

7 PACs in Aurad

8 PACs in Kurikota 550

9 PACs in Kamalapur

10 SBH in chincholi

11 SBH in shahapur

12 SBH in gulbarga

13 canara bank in kamalapur

Total

Number of agricultural barrowers

SBH and Canara Bank have larger agricultural farmers as their customers

when compared to PACs.The number of agricultural farmers seeking loan has

increased due to improved and user friendly banks facilities. The PACs and SBH

are lending loans to farmers’ at lower rate of interest when compared to non

institutional agencies.

Table 6.1.5: no of agricultural barrowers in sample banks

No. of barrowers PACs SBH Caara bank

100 to 500 6 - -

500 to 1000 3 2 -

Above 1000 - 1 1

Total 9 3 1

This table shows that there were no banks or societies have less the 100

members in banks or societies. 6 societies have members’ between100-500. 3

societies and 2 SBH have members between 5000-1000 and 1 SBH and I Canara

Bank have above 1000 members.

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Performance indicators across the institutions

Procedure of loan

The farmers are required to provide their documents like land records,

encumbrance certificate, receipt of tax, paid loan, and ―No.dues‖ certificate from the

financial institutions located in the area for this purpose. Banks and societies officer

opine procedures relating crop loans to be complex and lengthy. While some banks

disagreed with the statement. There fore in order to over come from the complexity

issuing of KCC to the farmers to lend loans to farmers and reduced the number of

document collection was the option introduced.

Time taken for sanctioning the crop loan

Table 6.1.6 Time taken for sanctioning the crop loan

Normal time PACs SBH Total

One week 3(33.33%) 2(50%) 5(38.5%)

15 days 4(44.44%) 2(50%) 6(46.1%)

One month 2(22.22%) 0 2(15.4%)

More then one month 0 0 0

Total 9(100%) 4(100%) 13(100%)

Source: field survey

This table shows the opinion of the bank officers regarding per taking to the time

needed for sanctioning the loan. The data shows total 5 (38.5%) banks (SBH and

PACs) take one week while 6(46.1%) take 15 days and 2 (15.4%) societies take one

month in passing the loans.

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Table 6.1.7 Security accepted by the banks and societies

Agency Security accepted

PACSs only members

CBs 12.5% -3rd party guarantee, 87.5% -land / assets

The table shows that the societies collect securities only from a member and

barrowing activity in the PAC’s has risen only negligible by 10%.

Time taking for sanctioning the Term loan

Table 6.1.8Time taking for sanctioning term loan

Normal time PACs SBH Total

One week 3(33.33%) 2(50%) 5(39%)

15 days 2(22.22%) 1(25%) 3(27%)

One month 3(33.33%) 1(25%) 4(31%)

More then one month 1(11.11%) 0 1(8%)

Total 9(100%) 4(100%) 13(100%)


5(38.5%) both banks take 15 days and 7(53.8%) and 1(7.7%) taking the time

one month and more than one month respectively.

Mode of Disbursement

All banks disburse credit in cash, or kind or both. This has an implication on

utilization of credit, as the possibility of diversion of loan amount is unproductive.

The purposes if received in cash are high in case of some PACSs, 100 per cent

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credit disbursal is made in cash. Few societies lend in cash and as well as in kinds

as per cent it is 67 per cent in cash and 33 per cent in kind. The kind component is

in various forms of inputs like fertilizers, pesticides, diesel or equipments. The

commercial banks do not lend in kinds. Only lending operation is in cash or

through cheques.

Rate of Interest Charged by the Institutions

Rate of interest charged by the lending source becomes a major Component of

transaction cost borne by the farmer. Higher the rate of interest, more expensive will

be the credit. The reported rates of interest are as under:

Table:6.1.9 bank wise rate of interest structure (%)

Agency ST MT LT Consumption loan

PACSs 1% 10% 11% -

CBs 7% 9.50-12.50 12 .00-14.00 13.14.50

The rate of interest in PACS is very low compared to commercial banks

(SBH) in cooperative banks they give only crop loan at an interest rate of 1%, and

10% and 11% on the MT , LT respectively. Commercial banks charged 7% on crop

loan, 9.50-12.50% on MT and 12.14% on LT loan, they also give the loan for

consumption purpose at 13-14.50% rate of interest. But in cooperative societies are

not give the loan for consumption purposes

Mode of repayment

Repayment of loans advance is again an important aspect of credit delivery

system, as it has an impact on financial health of the institutions. Poor repayment or

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delayed repayment or total denial to repay, will hamper the further credit flow from

the agency. So, repayment plan has to be well chalked out in advance and should be

convenient to both farmer as well as agency. So, sampled institutions were

questioned about various aspects related to repayment of loan.

Table: 6.1.10 Institution wise repayment schedule of loans

Agency Installment Pay the loan full

or installment ST MT LT

PACS 1 year - 6 monthly Full\partially pay

CBs 1-12

monthly

1 to -5

monthly

6 monthly Full / proportion

according to loan

Reasons for delay in repayments of agriculture credit reported

by bank employees

Different questions were asked to the bank employees, regarding actual delay in

repayment of selected defaulters. According to them in their opinion, high

percentage of clients (60%) defaulted the loan as they miss-utilized the amount for

non agricultural Purposes, like marriages, home construction, etc. The above

mentioned facts and figures it can be concluded that high interest rate on agricultural

loans, price hikes, delay in disbursements, and lack of sound monitoring by the bank

employees, changes in business/residential places, death/accident of the borrowers

etc. caused delay in repay of loan, other determining factors for repayment delay

were identified:

1. Illiteracy

2. Lack of income from agriculture

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3. Politician interference

4. Natural calamities

5. Low price of agricultural produce.

6. willful defaults

7. Government policies like loan waiver scheme in 2008.

8. Miss utilization of loan

repayments Action on misutilization of Loans

The agencies were asked about the action taken on their part. In case of

misutilization or diversion of loan. Almost all the institutions showed only a

minor cost given by these on the issuance of notices/warnings to such defaulters.

Technical guidance provided to the farmers

The responses of sampled institutions, show majority of the farmers seeking

financial help are not well educated or have least or in technical background. Hence,

the banks found that the farmers lag behind in adoption of latest technologies,

knowledge, machinery or new operations their. They still follow the age old practice

and knowledge handed over by their fore fathers or what the others do in the village.

If proper utilization of credit delivered it has to be done some sort of technical

guidance is a must. The onus of imparting this type of advice / guidance lies upon

there funding agencies to some extent. The responses of sampled institutions are as

under:

Table 6.1.11: bank wise technical Guidance provided to the farmers

Agency Yes\No How

PACs 6 ( %) yes Conducting the meetings or personal

contact

CBs 4% Visits or advice

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Most of the banks are providing some of guidance, utilization of loan,

lending modern technology and repayment of a credit .through visits, camps, and

meetings.

Part B: Sample Survey (Farmer)

In part B we analyze of the barrowing pattern of the sample farmers. It

further tries to study the trend in borrowing among different size groups for various

purposes in Gulbarga district. An attempt has been made to understand the quantum

of loan received by sample borrowers in commercial and co-operative banks. For

this purpose the sample houses holds chosen were 207, have been classified into

different groups on the basis of their socio-economic characteristics like ,caste,

literacy states, gender ,age ,land ownership etc.

Socio-economic characteristics of the sample barrowers:

No. of Sample barrowers:

The sample households were borrowing from commercial and co-operative

banks (SBH and PACs) in Gulbarga district.

Table6.2.1: Taluks wise number of sampling

Taluk PACs SBH Caner Bank Total

Chincholi 29 23 00 52

Shahapur 25 35 00 60

Gulbarga 38 48 09 95

total 92 106 09 207


In the above table the total number of farmers taken is 207 from among them

106 Farmers are borrow from SBH, 92 from PACs and 09 from Canara Bank. 115

farmers borrowed from SBH and 92 farmers have borrowed from Co-operative

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banks. The borrowers in both banks increased because of better irrigation facilities,

agro-climate conditions and banking facilities. The borrowers of commercial banks

had risen when compare to barrowed in co-operative banks.

Types Of Farmers:

Land holding is used as one of the important economic indicators of farmers.

The farmers are categorized into four groups on the basis of land holding in acres.

1) Marginal farmers: Those land holding up to 2.5 acres.

2) Small farmers: those whose land holding is between 2.5 acres to 5 acres.

3) Marginal farmers: those, whose land holding is between 5 acres to 10

acres,

4) Big farmers those whose between above 10 acres. Type of farmers

(sampling) given below.

Table6.2.2: bank wise sample farmers


The above table shows members of farmers in commercial banks as

marginal farmers being 19, 50 sample farmers are small farmers 30 sample farmers

are medium farmers and only 16 sample farmers are large farmers. And farmers in

Cooperative Banks as 24 sample farmers are marginal farmers, 36 are small farmers,

21 are medium farmers, and 11 are large farmers. Overall in both banks 43 farmers

Size of Landing No of farmers in

Commercial Banks

No of farmers in

Co-Operative Bank

Up to 2.5 acres 19(17%) 24(26.%)

Between 2.5 to 5 acres 50(43.5%) 36(39%)

Between 5 to 10 acres 30(26%) 21(23%)

Above 10 acres 16(14%) 11(12%)

Total 115(100%) 92(100%)

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have a less then 2.5 acres 86 farmers have a land size between 2.5 to 5 acres. 51

farmers have a land size 5 to 10 acres and only 27 have more then 10 acres of land

holding.

Share Of Different Caste Groups (SBH and PACs)

The sample households were classified into 3 Groups i.e. farming community

(OBC). SC/ST and others (including backward caste, Muslims.) Table shows the

village wise sampling farmers groups.

Table6.2.3: Village wise sampling (Farmers).

Village No.of SC/ST No. of OBC No of others Total

Miryan 9 07 01 17

Chimmaidalia 10 09 02 21

Ainapur 6 07 01 14

Vibhutihalli 4 14 - 18

Shahapur rural 10 08 03 21

Katamnhalli 12 06 03 21

Aurad 21 13 03 37

Kurikota 12 17 07 36

Kamalapur 12 08 02 22

total 96(46.4%) 89(43%) 22(10.6%) 207(100%)

Source: Field survey

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The table shows that out of the 207 sample farmers, 96 (46.4%) sample

barrowers are SC\ ST, 89(43%) and 22 (10.6%) barrowers are OBC and other caste

(its include the backward caste and Muslim).

Educational Status: ( Bank-wise)

The level of education of farmers has a close relationship with the barrowing

habit. It affects farmers in better use of credit in agricultural development.

Commonly we divided 2 groups that are illiterates and literates. It could bee seen

that among borrowers farmers who are literates are significantly high when

compared to illiterates. Dictated farmers avail a higher loans and better deal from

banks than the illiterate ones. Loan amount borrowed according to literacy status

both banks is indicated in table below. Here only four classifications are made i.e.

illiterate, primary (1 to 7 Std), High school (8th

to 10th

) and college (PUC to PG).

Table 6.2.4: bank wise educational status of sample farmers in undivided

Gulbarga district

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Education status Commercial

banks

Cooperative

Banks Total

Illiterate 49(43%) 41 (45%) 90 (43%)

Primary school 31(27%) 22(23%) 53(25%)

High school 19(17%) 16(18%) 35(18%)

Colleges 16(13%) 13(14%) 29 (14%)

Total 115(100%) 92(100%) 207(100%)


This table reveals educational qualification of the barrowers, 49 (43%) farmers

barrowing from commercial bank illiterate,31(27%) have primary school, 19

(17%)have high school even in Cooperative Banks 41 farmers are illiterate 22

studied up to primary school, 16 acquired high school and 13 have studied the up to

college level. Overall from both banks, if taken 43% are illiterates, 25% have

primary education, 18 % have high school education and 14% college level

education

Gender: (Bank –Wise )

In gender, we divided two types male and female. see the table given

below,

Table 6.2.5: No of male and female in both banks

Gender SBH PACs Total

Male 91 (79.1%) 74(80.4%) 165(79.7%)

Female 24(20.9%) 18(19.6%) 42(20.3%)

Total 115(100%) 92(100%) 207(100%)


This table explains that among 207 despondence, 165 (79.7%) male, and 42

(20.3%) are female. If taken barrowers banks wise 91 (79.1%) sample barrowers are

male and 24(20.9%) are female in SBH and in PACs, 74 (80.4%) are male and 18

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(19.6%) are female. In total 79.7% are male and 20.3% are female. It shows that

female participation also in banking activities for availing loans for agricultural

purposes and their awareness on agricultural loans and banking operation. This also

depicts presence of banking habits among the farmers.

Nature of family (family size)

Labour force engaged in agricultural operations of farmers is mainly drawn

from the farmers own family and hired labour is used to assist the family labors.

Table 6.2.6: nature of the family

Family size Commercial

bank

Cooperative

bank Total

Joint 52((45.2%) 39(42.4%) 91(44%)

Single 63(54.8%) 53(57.6%) 116(56%)

Total 115(100%) 92(100%) 207(100%)


Above table shows among SBH barrowers, 52 (46.55%) farmers live in joint

family and 63(54.8%) in a nuclear family. And in PACs, 39 (42.4%) of them

families are joint and 53(57.6%) of them nuclear. As a whole 91 (44%) families

have are joint families and 116(56%) are nuclear families . Joint family comprises of

above 15 members and nuclear families consist of less than 6 member.

Land type:-

Table 6.2.7: Two types of land i.e. Dry land and irrigated land.

Land type SBH PACs Total

Irrigation land 29(25.2%) 21(27.8%) 50(24.2%)

Dry land 76(66.1%) 57(63.5%) 133(64.2%)

Dry and irrigation land 108.7%) 148.7%) 24(11.6%)

Total 115(100%) 92(100%) 207(100%)


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In this table 50(24%) passes irrigation facilities and 64.2% have cultivated

dry lands. They are dependent on monsoon. Only 11.6% is having both dry land and

irrigation facilities. The irrigation facilities are high in Shahapur, compared to

Chincholi and Gulbarga taluka; most of the farmers do not have irrigation facilities.

Types of Irrigation

The extent and type of irrigation facilities for agriculture determines the

stages of agricultural development.

Table 6.2.8: Source irrigation

Farmers in banks Pump set Borewel Canal Total

Commercial bank 05 09 25 39

Co-operative banks 03 04 28 35

Total 08 13 52 74


The table reveals the type of major irrigation source to be canal. Highest

member of farmers in the taluk of Shahapur obtain irrigation facilities through canal

compared to that of sample farmers of other two taluks. The sample farmers who

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have irrigation farmers are 74(35.74%) through canal accounted for 52(70.27%).

Total of the sample farmers who have pump set and bore well irrigation account for

8 (10.81%) and 13 (17.56%) respectively.

Cropping pattern

Cropping pattern is the most important aspect in agriculture sector. Across

the taluk there are significant variations in cropping pattern among the major crops

in the district. Tur is cultivated by most of the sample farmers in majority of the

taluks of Gulbarga and chincholi. A farmer raises 2 to 3 crops in a year.

In the survey we observed that out of 207 formers about 67% of them grow

tur and remaining grow sugarcane, rice, cotton and other commercial crops (Chilies,

onion, vegetables and turmeric). Tur is cultivated by maximum number of sample

formers in Gulbarga taluka and in some areas of Chincholi taluka. Among 207

sample formers studied in Chincholi and Shahapur 35% of them cultivated

sugarcane, 40% rice, 25% cotton.

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Source of income ( per capital income)

Analysis of income level of sample farmers reveals the purchasing power

and credit worthiness of borrowers. The income of the borrowers is classified into

agriculture and other source of income.

The income derived from agriculture varies significantly among sample

farmers from the sample taluka due to differences in the fertility of land. The per

capita income of the sample farmers in Shahapur taluka is highest as majority of

farmers grow commercial crops like tur, rice, cotton and sugarcane which fetch high

income to the cultivator. In Chincholi taluka it was observed that with the farmers

cultivating sugarcane as a prominent crop they simultaneously were engaged in

querying activity during the off season which serves as an additional source of

income to them in that area.

X2test No.—(06)

Is there any association bet. Main sources of income & Type of land?

H0:— There is no association bet. Main sources of income & Type of land. i. e.

they are independent.

H1:— There is a association bet. Main sources of income & Type of land.

Sources of income ( Main ) * Land Type Crosstabulation

Land Type

Total Irrigation Dry land

Irrigation &

Dry land both

Sources of income

( Main )

Agriculture No. 74 123 8 205

% 100.0% 98.4% 100.0% 99.0%

Dairy No. 0 2 0 2

% .0% 1.6% .0% 1.0%

Total No. 74 125 8 207

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Sources of income ( Main ) * Land Type Crosstabulation

Land Type

Total Irrigation Dry land

Irrigation &

Dry land both

Sources of income

( Main )

Agriculture No. 74 123 8 205

% 100.0% 98.4% 100.0% 99.0%

Dairy No. 0 2 0 2

% .0% 1.6% .0% 1.0%

Total No. 74 125 8 207

% 100.0% 100.0% 100.0% 100.0%

Results: X2=1.325, df=2, Co-efficient of Contingency= 0.080

Conclusion: X2

cal< X2

tab value at 5% level of significance. Hence, it is not

significant. It means, there is no association bet. Main sources of income & Type of

land & there exists a negligible degree of association.

The above table ( ) are revealed that the information about the association of

main source and with the type of land. It is clear from the above table the at 5%

level of significance in the 2 degree of freedom. The calculated value is 0.080 which

is more than the significance of 0.05. Hence the null hypothesis has been rejected

and alternative hypothesis has been accepted. It can be informed that there is a

relationship of main source of income with the type of land.

One-way classification-(01)

Is there a significant difference bet. main agriculture income w.r.t. their type of

land?

H0:— There is no significant difference bet. main agriculture income w.r.t. their

type of land.

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H1:—There is a significant difference bet. main agriculture income w.r.t. their type

of land.

ANOVA

Income from Agriculture (Main)

Sum of

Squares df Mean Square F Sig.

Between Groups 5.306E10 2 2.653E10 22.790 .000

Within Groups 2.375E11 204 1.164E9

Total 2.905E11 206

Conclusion: Fcal > Ftab value at 5% level of significance. Hence, it is significant. It

means, there is a significant difference bet. Main agriculture income w.r.t. their type

of land.

Table no( ) despite about the relationship of main agricultural income with

respect to the type of land. It clear from the above table that to the 5% level of

significance in 2 degree of freedom the calculated value is 0.00 with is below the

significance value of 0.05. hence the null hypothesis has been accepted and

accordingly the attractive hypothesis has been accepted.

The inference can be drawn that there is no significant relation between the

main agriculture income and type of land.

Cost of cultivation

Cost of input is major head of expenditure in total cost of cultivation. The

cost of variable inputs (seeds, pesticides, fertilizer) is found that it increases with the

increase in size of land. Average farm expenditure is found to be Rs. 10,000

maximum dry land and Rs. 15,000 in irrigation on the casual labour. i.e. per labour

cost is 150 to 200/-, followed by 15% on fertilizer in total farming cost.

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Methods of Marketing

Table 6.2.9: method of marketing

Method of marketing No. farmers %

Direct in mandies 37 17.87

Co-operative societies 11 5.31

Agencies 25 12.07

Traders 37 17.87

APMC 97 46.85

207 100%

Source: The field survey

This table revealed that grows major crops like Tur, Jawar, Sugarcane,

Cotton, Rice. Tur (redgram) grown by majority of the farmers are sold in APMC

(46.8%), Rice is sold to mills, sugarcane to factories and Cotton to mills. Majority of

the farmers are marketing in APMC i. e 46.85%, 17.87% to traders, 12.07% in

agencies, 5.31% in co-operative and 17.87% in direct mandies. Further the sample

farmers were of the opinion they sold their products price of their crops increased.

Barrowing and utilization pattern of loan among the sample groups

Source of loan:

Some of agricultural credit divided into 2 types. First is the institutional

finance and second one is the non institutional source that includes money

lenders, relatives and friends. In sampling farmers most of them have

borrowed from institutional source like, commercial banks, co-operative

societies and RRBs.

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Table – (45): Sources of loan

Descriptive Statistics

Sources of loan N Minimum Maximum Mean Std.

Deviation C.V.

Amount borrowed

from money lender

(in Rs.)

71 20000 100000 39281.69 17674.181 44.99

Amount borrowed

from Traders (in Rs.) 3 20000 30000 23333.33 5773.503 24.74

Amount borrowed

from friends &

relatives (in Rs.)

1 32000 32000 32000.00 . —

Crop loan from

Commercial bank (in

Rs.)

101 4000 80000 30256.44 15909.459 52.58

Term loan from

Commercial bank (in

Rs.)

15 150000 800000 425000.00 218966.729 51.52

Crop loan from Co-

operative societies

(in Rs.)

83 5000 425000 23661.45 46702.929 197.38

Term loan from Co-

operative societies

(in Rs.)

7 80000 780000 212857.14 251758.104 118.28

Table no ( ) explain about the sources of loan for agriculture. It is clean from

the above table that the level of consistency as measure by the co-efficient of

variation is more in amount borrowed from trader. Money lender and bank and

cooperative society’s loan.

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Whereas the level of consistency as measured by the coefficient of variation

is more in term and crop loan from commercial banks than the term and crop loan

from cooperative societies.

The inference can be drawn that even till today also more member of farmers

are dependence on the loan provided by the money lenders in frequent cases than the

banks and cooperative societies.

Institutions from which respondents borrowed loans

Sampling banks chosen are commercial banks (SBH) and co-operative banks

(PACs)

Table 6.2.10: institutions from which respondent loans

Name of institutions No. of farmers

Commercial banks 115(55.56%)

Co-operative banks 92(44.44%)

Total 207(100%)


In this table Selected sampling borrowers 115(55.55%) are sample

respondent from commercial bank (SBH) and 92 (44.44%) respondent are borrowers

from cooperative banks. (PACs).

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Reasons for not borrowing from commercial banks:

The sample farmers, those who have borrowed from co-operative banks

(PACs),in their opinion ,they face difficulties in availing loans from commercial

banks when compared to co-operative banks. So, they prefer PACs and reasons

for not barrowing from commercial banks. Like,

1. High rate of interest,

2. Delay in loan sanction,

3. Exploitations,

4. Politician’s interference in sanctioning loans, and

5. High repayment cost.

Reasons for not borrowing from co-operative banks:

At the village level the PACs are main source of agricultural credit. Many

people borrow from co-operative banks because of membership and landed low

level of interest. But some peoples are not members in the society. Many reasons

for not barrowing from PACs like,

1. Inadequate loan,

2. Difficulties in loan supervision,

3. Delay in loan sanction and

4. Not give proper information’s about the agricultural development loan.

Borrowed from money lenders:

Old Gulbarga district has large chunk of poor farmers. They depend

upon agriculture where they cultivate dry lands. Only 30% of them have irrigated

land and 70% depend on monsoons. Hence farmer’s barrow money from

159

Commercial and Co-Operative Banks for agricultural purpose but the amount is very

negligible for agricultural development. As banks don’t lend for consumption

purposes therefore people borrow from money lenders for agriculture as well as

consumption purposes. The table below shows that 34.3% of the people have been

borrowing from money lenders.

Table6.2.11: categories of amount barrowed from money lenders In Rs)

Categories of amount Numbers %

Low= 20000-32000 34 16.4

Medium=35000-50000 30 14.5

High=75000-100000 07 3.4

Not applicable 136 65.7

Total 207 100.0


This table reveals that the government provides loan facilities through

institutional agencies but the volume of loan is very small for it to be adequate for

agricultural purposes and hence farmers take additional loan from private agencies

like money lenders. From the survey it could be found that 16.4 % respondents

barrowed a loan amount Rs 20000- Rs32000, 14.5 %an amount of Rs35000-

Rs50000,and 3.4% raised money up to Rs75000- Rs1 lakh. As a sum total of 34.29

% sample farmers borrowed from institutional and private sources. This table in

chart is given below 34.3% sample farmers’ barrowing from money lenders.

160

Categories of crop loan from commercial banks:

Out of 115 respondents from commercial bank, 101 barrowers have barrowed a

crop loan from commercial banks. Crop loan is essentially for agricultural

development.

Table: 6.2.12 Categories of crop loan from commercial banks: (Rs)

Categories of loans in Rs. Numbers %

Low= 5000-13200 12 5.8

Medium=15000-25000 35 16.9

High=30000-40000 39 18.8

Very high=45000-50000 15 7.2


Total 207 100.0


The analysis of table reveals that majority of sample farmers in commercial

banks availed crop loan. Of the 115 sample farmers 101 farmers have taken crop

loan

161

Categories of crop loan from co-operative banks (Rs):

The primary agricultural co-operative societies give crop loan for purchasing

marketing inputs see the table given below,

Table:6.2.13 Categories of crop loan from co-operative banks (Rs):

Categories of loans in Rs. Numbers %

Low= 5000-8000 28 13.5

Medium=10000-14000 27 13.0

High=20000-30000 20 9.6

Very high=35000-60000 10 4.8


Total 207 100.0


The table shows that societies are lending loans to farmers, 28 (13.5%)

respondents barrowed lowest amount it is Rs.5000-8000, 27 (13.0%) respondents

took loan of Rs.10000 -140000 and 9.6%(20%) respondent barrowed an amount it is

Rs.20000 to Rs.33000. and only 10 (4.8%) respondents took very high amount for

agricultural development i.e. Rs.35000 to 60000. societies are giving low amount

162

for agricultural development per acre a loan of Rs5000 is given at the low level of

interest. Every year it has increased to 10% on the amount.

Categories of term loan from commercial banks (SBH) (Rs):

Table: 6.2.14 Categories of term loan from SBH

Categories of term loan No .of farmers %

Low= 150000 -475000 8 3.9%

High=50000-800000 7 3.4%

Not applicant 192 92.8%

Total 207 100%


The table reveals that only 15sample members had taken term loans from

commercial banks. Out of which 8 members had taken loan between Rs.150000 to

475000 and 7 members took loan amount between Rs.500000 and Rs.800000.

163

Categories of term loan from cooperative banks(PACs)

In recent years the cooperative banks also give importance once to term

loans so, they give lend term loan for agricultural development like

irrigation, land development, purchasing of tractor.

Table: 6.2.15 Categories of term loan from cooperative banks

Categories of term loan No of farmers %

Low=8000-125000 4 1.9%

High=150000-780000 3 1.4%

Not applicant 200 96.6%

Total 207 100.0


The table shows that the only 7sample farmers had taken term loan in the

cooperative banks. 4(1.9%) sample farmers availed loan amount is between

Rs.80000and 125000 and 3 (1.4%) of them borrowed an amount between Rs.150000

to 780000.

164

It shows the extent of term loans in transacted commercial and cooperative

banks. It is highest in commercial banks when compared to cooperative banks,

because cooperative banks do not have such huge amounts.

Pattern of utilization of loan in both commercial bank and co-

operative societies:

Farmers’ barrow short term and long term loans for agricultural

purposes. The tables below show how the barrowed amount is utilized. So,

utilization pattern is devised in to 4 groups

Table: 6.2.16 utilization of loan amount

Utilization of loan Number %

Group –I 37 17.9

Group –II 163 78.7

Group –III 5 2.4

Group –IV 2 1.0

Total 207 100.0

165

.Groups-I: 1. Land development

2. payment to labour

3. Purchase of agricultural implements.

Groups-II: 1. Payment to labour

2. Purchase of inputs

3. Domestic consumption.

Groups-III: 1. Land development

2. Purchase of vehicles

3. Repairs.

Groups-IV: 1. marketing of products

2. Purchase of inputs

3. Purchase of land.

This table shows that 78.7 %( 163) barrowers utilize the loan for Group –II.

Purpose which includes purchase of inputs, consumption and payment to labour

while 37 (17.9%) of them utilize the loan for Group –I reasons, 5(2.4%) sample

farmers use for Group –III activities and only 2(1.0%) of them sample farmers use

the loan for Group –IV reasons. So, this table reveals that maximum farmers use the

loan primarily for the purchase of marketing inputs (i.e. seeds, fertilizers, pesticides)

and the remaining part of loan is used for consumption activities.

166

Table –(48): Amount of loan spent for various purposes

Descriptive Statistics

N Minimum Maximum Mean Std.

Deviation C.V.

Amount of loan spent

for Seeds (in Rs.) 99 500 10000 2870.20 2380.393 82.93


for Manure (in Rs.) 31 1200 8000 4425.81 1650.448 37.29


for fertilizer (in Rs.) 188 300 15000 4286.44 3144.937 73.37


for Chemicals &

pesticides (in Rs.)

186 1000 49000 6603.23 7580.665 114.80


for payment of labour

charges (in Rs.)

182 1500 250000 38037.91 41231.583 108.40


for Day to day

consumption (in Rs.)

188 500 8000 3495.74 1156.097 33.07


for Celebration of

marriages or festivals

(in Rs.)

185 400 30000 6145.41 4088.490 66.53


for Payment of past

loan (in Rs.)

88 500 85000 10539.77 13924.720 132.12


for Any other (in Rs.) 0 0

Table no 48reveals the information about amount of loan spent for various

purposes. It is clear from the above table that the level of consistency in amount of

167

loan spent for day today consumption and manure is more than the amount of loan

spent for celebration of marriage or festivals, purchase of fertilizers, seeds, payment

of labour changes, purchase of chemicals and pesticides and payment of past loan.

It can be concluded that the farmers uses the loan amount for their personal uses

than the purposes for which they have taken the loan.

Statement of assistance available of the source of credit:

The institutional and non-institutional agencies give loan for agricultural

development and also consumption purpose. Among the institutional agencies, the

Commercial Banks lend basically for business purpose. But Co-operative Societies

lend purely for agricultural purpose .but Non-institutional agencies provide loan for

different purposes.

The institutional agencies provide not only loan facilities but also marketing

and training facilities, inputs supply and supply of technology etc. But the Non-

institutional agencies don’t provide any such facilities. Among 207, Sample

borrowers 50% of the sample farmers obtain (services).

Table 6.2.17 Statement of assistance available on source of credit

Services Institutional

agencies

Non- institutional

agencies

Marketing 24 48

Training 05 -

Input supply 25 59

Supply of technology - -

Others(specify) - -

Total 54 107


168

The table revels that the institutional agencies particularly PACS give loan for

agriculture and also purchase of seeds, fertilizer facilities and machineries for

agricultural development. And some institutions like sugar factory give seeds at low

prices and societies in turn purchase the agriculture products at government prices.

Frequency of Banking officials visits

Generally bank officers visit the farmer’s farm land to verify the land and

how he extends the utilization of credit by them in the specified activity. The

primary data related to visits of bank officers before and after sanction of loan have

been analyzed in the table given below

Table: 6.2.18 Does the banks visits the field regularly of frequently

Visits the field No. of farmers %

Yes 57 27.5%

No 150 72.5%

Total 207 100%


The table shows that the banks officers’ visits are not a regular basis.

57(27.5%) farmers are of the opinion that the bank officers visit at the time of

sanctioning the loan and after the sanction of the loan. And 150(72.5%) sample

farmers have said that they have not come to the fields even before or after the loan

was sanctioned.

Table: 6.2.19 if yes, how many times during the last year

How many times No. of farmers %

1 37 18%

2 18 9%

3 2 1%

Total 57 28%


169

When did he visit:

Table: 6.2.20 when did he visit?

When did he visit No. %

Before disbursing the loan 45 21.7%

Immediately after distribution the loan 10 4.8%

During the period of loan preparation

and sowing or planting or seeding 2 1.0%

Total visits 57 28%


It shows that the 45(21.7%) say that banks officers visits only during the time

of giving the loan, 4.8% barrowers say that after distributing the loan and, 1.0%

barrowers say that during the time of seeding. Some farmers said that the bank

officers visit during the time of repayment period.

Extra expenditure for availing loan

The farmers borrow from banks or societies. They spend extra amount

on availing the loan. They incur the expenses for documentation expenses for

bringing of officials to the farm, for payment to middleman and others expenditure

like transportation etc, and per middleman amount of Rs.200 to 5000 is charged

from the farmers (borrowers). It is high in the cost of available of the loan.

Table: 6.2.21 extra expenditure for availing of the loan:

Any expenditure No. of farmers %

Yes 192 92.75%

No 15 7.24%

Total 207 100%

The farmers are availing the loan they pay the extra expenditure. such as

middleman fee, document fees, bringing the official to farms and other expenditure

170

are including traveling cost etc,.192(92.75%) sample farmers pay the extra

expenditure. only 15(7.24%) not pay any expenditure. They pay the extra amount

because; they have no any information about the loan.

Repayment of loans:

One of the main indicators of sources of any credit programme or institution

is terms of quality of service provided and the extent of its economic input in the

loan repayment performance of its borrowers: The extent of repayment of loans

borrowed is the barometer of success of the programme or institution.

In the study, an attempt is made to identify the repayment performance and

nature (causes of defaults) of the sample households. And understand the reasons

behind the delay in the repayment of the institutional loans while only a handful of

them repay the entire amount,

Table: 6.2.22 Pattern of repayment the loan amount in both banks.

Types of farmers Fully paid partially paid Not paid Total

Marginal farmers 24(19.4%) 10(20.8%) 8(22.9%) 42(20.3%)

Small farmers 58(45.8%) 15(31.3%) 16(45.7%) 89(43%0

Medium farmers 22(17.7%) 11(22.9%) 5(14.3%) 38(18.4%)

Big farmers 20(16%) 12(25%) 6(17.4%) 38(18.4%)

Total 124(100%) 48(100%) 35(100%) 207(100%)


In this table we show that among the total sample barrowers (207),

124(59.9%) sample barrowers have payed the entire amount of the loan, and

48(23.2%) sample farmers have partially pay and 35 (17%) sample farmers have not

at all paid the loan. totally 124 (59.9%) sample farmers paid the loan regularly, 48

(23.2%) paid partially and 35(17%) did not pay at all.

171

Farmers who paid the entire amount are 124 (59.9 %), partially paid

farmers are 48(23% ) and those who did not pay are 35 (15%). The table shows that

the repayment of loan is higher than its non payment. Reasons identified for prompt

repayment are under to avail fresh loans or ethical reasons or income obtained from

other source. Table also shows that the marginal and small farmers paid the full

amount regularly when compared to medium and large farmers.

Table: repayment the loan amount in both banks

Bank wise Fully paid Partial paid Not paid Total

Cooperative bank 64 18 10 92

Commercial banks 59 33 23 115

Total 122 51 33 207


This table shows that 122sample barrowers are full paid the bank loan, 51

are partial paid and 33 barrowers are not paid the bank loan

This chart tells that the bank amount are full paid in cooperative society

compared to commercial bank and not paid is higher in commercial bank compared

172

to cooperative society because the government policy that is loan waiver scheme

followed by the cooperative society

Table:6.2.24 caste wise defaulters

Caste Pay Not pay

SC and ST 43 28

OBC 14 12

Muslim 50 40

Others 13 9

Total 111 89

Table: 6.2.25 family size defaulters

Size of family Pay Not pay

Joint family 57 38

Nuclear family 64 46

This table shows that the among 207 respondent in commercial bank and

cooperative societies, defaulters more in nuclear family 46 respondents are not pay

the loan in current and 38 respondent are in joint family ,because of many reasons.

Characteristics of defaulters:

Credit has become an indispensable input to the practitioners of modern

agriculture. In spite of better productivity and income compared to traditional

agriculture, the higher cash outlays have substantially increased that would play a

vital role in the growth of farmers. Developing country like India where resources

are no match for the demand, any developmental programme can be successful

173

without adequate co-operation from the beneficiaries, which they can extend by

making timely and regular repayment of their dues to the banks. Till now, adequate

attention was not paid to the timely recovery of the loan advanced.

The credit supplied is capable of raising the production and productivity only

if it satisfies the credit requirement of the farmers. The availability and utilization of

credit in time and in adequate quality tend to become a per-require for sustained

agricultural growth. At the same time the prompt repayment of the credit is of

crucial importance for recovery as well as to install confidence among depositors.

The study focused on the identification of the characteristics of difficulties or

delinquency in repayment of credit.

literature such as Pandey and Muraleedhar (1977), Pradhan and Sharma

(1981), Chand and Sidhu (1985), Kalankar and Rajmane(1987) and Chenyappa

(1990) have identified the factors such as of income from sources other than crop

production income, of loan utilized to crop production, per capita consumption

expenditure, size of holding, efficiency of loaning ratio of dependents in a family

and proportion of such crops.

In this way this study attempt to identify the factors responsible for defaults.

To show the characteristics of defaulters the following variables are made,

1. Farm size in acres

2. Cropping pattern

3. Total income

4. Per capital consumption expenditure

5. Education of barrowers

6. Age of barrowers

7. Ratio of dependents to the total family members

174

8. Type of farmers.

Reasons for diversions of credit and what are the reasons for

overdue.

No. of farmers do not pay the loan in time because of many reasons. The

repayment of loan is very less in the Commercial Banks compared to Co-operative

societies because of the loan waive scheme in the societies. But many farmers do not

repay the loan for the reasons quoted below.

Table: 6.2.23 reasons for not repaying the agricultural loan in time

Sl.No Reasons No. Farmers %

1 Failure of crops 70 84.33%

2 Low income generation from farm sector 52 62.65%

3 Consumption 48 57.83%

4 Natural calamities 68 81.92%

5 Govt. policy for liquidation of dept. 30 36.14%

6 Low price of product 64 77.10%

7 Heavy interest burden of pvt. Loan 21 25.30%

8 Absences of proper marketing facilities 25 30.12%

9 Possibility of loan waives by Govt. 29 34.93%

10 Division of institutional loan for

unproductive purpose. 39 46.98%

11 Unwilling to replay 21 25.30%

12 Advice of politician/brokers 32 38.55%


Out of the total sample farmers, 83(40.09%) did not repay (including partially

paid) loan in both banks. The failure of crop, low income generation from farm

sector, consumption, natural calamities and low price of product and usage of loan

for unproductive purposes are the main causes for delay in the repayment of

175

agriculture. It is 84.33%, 62.65%, 81.92%, 77.10%, 57.83%and 46.98%

respectively.

Reasons for prompt repayment of bank loan or PACs loan

Some sample borrowers have been repaying the agricultural loan in time

because of higher income from agriculture, income received from Non-agricultural

sources. Ethical reason so as to get larger loans in the coming year etc,

Table: 6.2.24 reasons for prompt repay the agricultural loan

Sl no Reasons for prompt repayment No. farmers %

1 Higher income from agriculture 29 23.4%

2 Income received from non-agricultural

source

19 15.3%

3 For moral reasons 27 21.8%

4 For getting larger loan next year 49 39.5%

Total 124 100%

176


The table shows that the sample farmers paid the full amount. 124(59.9%)of

them paid the loans promptly because of reasons such as higher income from

agriculture, income from other source, ethical reasons and want to get fresh loan.

So, 39.5% sample farmers have promptly repaid the loan for getting the fresh loan.

Repayment period:

In both banks crop loan period for short term loan is one year and medium term

loan is above 5 years. Farmers identified entirely depended on agriculture and had

there is no other source of income when they received the loans from banks. Hence

they do not repay the loans within time. Because of reasons already discussed above

sample barrowers say that the repayment period is very short, so the government

needs to extend the period of repayment of loan. Table shown in below.

Table: 6.2.25 repayment period for crop loan and term loan

Period is short No. farmers %

Yes 57 28%

No 39 19%

Not replied 111 54%

Total 207 100%


177

A sample farmer (barrowers) indicates the appropriate period of repayment.

Small and marginal farmers were of the opinion that crop loan repayment period

should be raised from 1 to 2 years. Term loan repayment period is Bi-annual (6

months).this as to be increased. The table shows that the 57(28%) sample farmers

said that the repayment period is too short, 39(19%) said the repayment time was not

short and 11(54%) did not reply for this question. Most of the farmers were of the

opinion that the repayment period was too short and there fore it should be raised.

Table: 6.2.26 farmers indicates appropriate period of repayment in year

Appropriate

period

No. of

farmers %

Up to 2 years 63 30%

2 to 5 years 19 9%

5 above years 14 7%

Not replied 111 54%

Total 207 100%

The crop loan period was increased 1 to 2 years

Farmers opinion about commercial and cooperative banks

1. Amount of loan

Table 6.2.27: opinion on Amount of loan

Commercial bank Cooperative banks

Sufficient 69(60%) 65(71%)

Not sufficient 40(35%) 27(29%)

Not replied 6(5.%) 00

Total 115(100%) 92(100%)


178

This table shows that the opinion of the respondent for the amount of loan

given. 69(60%) and 65(71%) of respondents were of the opinion that give sufficient

for the amount of loan in commercial cooperative banks respectively. And 40(35%)

and 27(29%) respondents were of the opinion that the amount was not sufficient

loan in commercial and cooperative banks respectively. Because of the increase in

price and low level of income.

2) Time of receipt of loan

Table 6.2.28: farmer’s opinion on Time of receipt of loan

Commercial banks Cooperative banks

In time 79(69%) 65(71%)

Not at time 17(15%) 17(15%)

Very late 05(4%) 0(0)

Not replied 14(12%) 10(9%)

Total 115(100%) 92(100%)

Table reveals respondents who say that the commercial and cooperative

banks delaying in disbursing the loan to farmers was 79(69%) and 65(71%) in both

banks respectively and 17 (15%) farmers said that banks were not giving the loan

within time 17(15%) in both banks respectively and 5(4%) farmers were taking very

late in commercial banks 14(12%) have replied .

3) Rate of interest

Table 6.2.29: farmers’ opinion on rate of interest


Lower 32(28%) 89(97%)

Reasonable 12(10%) 3(3.3%)

179

Higher 65(57%) 0

Not replied 06(5%) 0

Total 115(100%) 92

Table shows that the rate of interest, 32(28%) and 89(97%) respondent

opinion of the rate of interest in commercial banks and cooperative banks is very

low respectively. And 12(10%) and 3(3.3%) respondents said that it was

reasonable in both banks. And 65(57%) respondents were of the opinion that it

was higher in commercial banks when compared to cooperative banks

4) Staff Treatment

Table 6.2.30: farmer’s opinion on staff treatment


Good 67(58.3%) 69(75%)

Sufficient 12(10.4%) 16(17.4%)

Bad 25(22%) 7(8%)

Not replied 11(10%) 0(00)

Total 115(100%) 92(100%)

The table regarding the opinion about staff treatment, when the farmers

contact with the banks.67 (58.3%) and 69(75%) respondent told that it was good in

both commercial banks and cooperative banks. When the farmers contact farmers

said in 12(10.4%) of the commercial and 16(17.4%) in cooperative banks was not

sufficient as it is 11(10%) in commercial and 7(8%) in cooperative banks.

5) Loan supervision

Table 6.2.31: farmers’ opinion on Loan supervision

Commercial bank Cooperative bank

Frequency 79(69%) 73(79.3%)

180

Non that frequent 30(26%) 19(21%)

Not replied 06(5%) 0(00)

Total 115 92(100%)

When asked about the opinion about the loan supervision, and banks

supervision frequency it 79(69%) and 73(79.3%) in commercial and cooperative

banks in respectively. And not frequency is 30(26%), 19(21%) in commercial and

cooperative banks respectively. Only 5% respondent has not replied.

6) Loan procedure

Table 6.2.32: farmer’s opinion on Loan procedure

Commercial bank Cooperative banks

Easy 42(37%) 64(70%)

Difficult 63(55%) 26(28%)

not replied 10(9%) 02(2%)

Total 115 92

This table shows that the opinion about the loan procedure.42 (37%), 64(70)

respondent said that the loan procedure is easy in commercial and cooperative banks

respectively. And 63(55%), 26(28%) respondent has faced the difficulty in loan

procedure in commercial and cooperative banks respectively. 10(9%0, 2(2%)

respondent not replied.

2. Awareness of the farmers :

Table 6.2.33: Awareness of the farmers

Awareness Yes no Not replied Total

Amount loan sanctioned 157(76 %) 28(14%) 22(11%) 207

Rate of interest 116(56.03%) 65(32%) 26(13%) 207

Duration of loan due

date and installment 100(48.30%) 73(35.3%) 34(14%) 207

181

Consequence in case of

difficult 76(41.5%) 102(49.2%) 17(8%) 207


This table shows that the 60% sample respondent have awareness on the amount

of loan, ROI, duration of loan and cash difficulties.etc,. In the total sample

respondent 157 (76%), 116(56.03%), 100(48.30%), 76(41.5%), have awareness on

the source respectively.

3. improve the economic position sample farmers:

The sample farmers say that bank loan in both banks have improved their

financial position by creating in small amounts, additional income support for their

family. Because the banks and societies giving the loan at low rates of interests for

purchase of marketing inputs like seeds, fertilizers and pesticides. This helps the

farmers to a great extent in their development.

Table: 6.2.33.improve the economic position if farmers

Has improved your position No. farmers %

Yes 86 42%

No 48 23%

not replied 73 35%

Total 207 100


Table reveals that after having received credit the position of sample

respondents their living standards have improved but in a very low because high

prices of goods. and 23% respondent said that before and after credit there is no

increase in living or economic position, and 35% respondent are not responding for

this question. Whatever, the credit is important to the agriculture and it helps to the

purchasing the marketing inputs.

182

Table –(77): Correlation Co-efft. Bet. Income & saving in case of Benefits from the

utilization of loan: After credit

Correlations

Income in Rs.

(Benefits from the

utilization of loan:

After credit)

Saving (Benefits

from the

utilization of

loan: After credit)

Income in Rs. (Benefits

from the utilization of

loan: After credit)

Pearson Correlation 1 .926

Sig. (1-tailed) .000

N 196 193

Saving (Benefits from

the utilization of loan:

After credit)

Pearson Correlation .926 1

Sig. (1-tailed) .000

N 193 196

Conclusion: There exists a very high degree of correlation bet. income & saving in

benefits from the utilization of loan: After credit. It means, there is very close

relation bet. income & saving. This implies that as income increased savings also

increased.

4. Participated in Loan Mela :

Farmers have information about the loan mela but they are not participating in

the mela because these melas are conducted in the city level not in the village level.

So, farmers not go for city. And when banks conduct these Mela they informed only

to big farmers not small or marginal farmers. So, only big farmers get the benefit of

the banks facilities. So in this way only 6.3% sample farmers are participated in the

loan Mela , see given the table

Table: 6.2.34 No of farmers participated in the loan mela

Participated in loan mela No. of farmers %

Yes 13 6.3%

183

No 194 93.7

Total 207 100%

Table shows that the only 6.3% sample farmers are participate in the loan

mela which is conduct in the district level and 93.7% respondent have not

participated in this mela.

Is there any association bet. the sources from which respondents prefer to take

loan in future & their reasons for preference of institutional agencies?

From which sources you prefer to take loan in future? * State the reasons for the preference of

institutional agency / sources. Cross tabulation

State the reasons for the preference of

institutional agency / sources. Total

Not

replied

COMBN-

I

COMBN

-II

COMBN

-III

From which sources

you prefer to take loan

in future?

Not replied No. 1 0 0 0 1

% 4.2 0.0 0.0 0.0 0.5

Commercial Bank No. 20 8 42 38 108

% 83.3 8.3 93.3 90.5 52.2

Co-operative

Societies

No. 3 88 3 4 98

% 12.5 91.7 6.7 9.5 47.3

Total No. 24 96 45 42 207

% 100.0 100.0 100.0 100.0 100.0

Note: —

1) COMBN-I: — (1)Low ROI (2)Possibility of post loan service (3)No

exploitation (4) Easy availability

2) COMBN-II: — (1) Better customer service (2)No exploitation (3) Possibility

of post loan service (4)Large amount

184

3) COMBN-III: — (1) Easy availability (2)Better customer service (3)Large

amount (4)No exploitation

Results: X2=148.284, df=6, Co-efficient of Contingency=0.646

Conclusion: X2

cal>X2

tab value at 5% level of significance. Hence, it is

significant. It means, there is a association bet. Sources from which respondents

prefer to take loan in future & their reasons for the preference of institutional

agencies & there exists a substantial degree of association.

Table 12 association between to sources from which respondent prefer to table,

loan in future and their reasons for preference of institutional agencies.

Table depicts the information about the source from with respondents prefer to

take loan in future and their reasons for preference of institutional agencies. It is

clear from the above table that, at the 5% level of significance, the calculated value

is 0.646, which is more than the slandered value is 0.05. so, the null hypothesis is

rejected accordingly the alternative hypothis is accepted.

The conclusion can be drown the financial institutional agencies are advised to

take some measures to attract and retain the customers by providing them good

financial aid.

5. Conclusion :

Sample of 207 farmers were interviewed from 13 banks (including

commercial and cooperative banks) in 3 taluks, out of the total sample marginal,

small, medium, and large farmers constituting 20.77 %, 41.54 %, 24.63 %,

and 13.04% respectively. Education wise classification of farmers reveals

185

that sample farmers are more illiterate or less educated. College level education

is high among the large farmers. Main source of irrigation in the undivided

Gulbraga district is Canal. Tur is major food crop and sugarcane and cotton is

main commercial crops in the district. The per capital income of the sample

farmers is very low.

Majority of the sample farmers (89.37%) barrowed crop loan and (10.62%)

barrowed term loan. crop loan barrowed utilized loan amount for the agricultural

purpose. The major reasons for diversion of crop and term loan are consumption

and repayment of old loan.

Large farmers have low transaction cost and marginal farmers have a

highest cost of transaction. The higher the level of education of sample farmers,

lower is the transaction cost. The transaction cost for term loan is high compared

to crop loan. The conclusion can be drown the financial institutional agencies

are advised to take some measures to attract and retain the customers by

providing them good financial aid.

Part A: banks Survey Introductionshodhganga.inflibnet.ac.in/bitstream/10603/38509/12... ·...

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Transcript of Part A: banks Survey Introductionshodhganga.inflibnet.ac.in/bitstream/10603/38509/12... ·...