Costs of operations in agricultural financing by formal agencies

Abstract

The purpose of this paper is to first briefly discuss the main elements of costs in agricultural finance operations of formal agencies. Secondly, the sources of high administrative costs are identified. And finally a strategy is proposed for reducing these high costs. These objectives are discussed mainly in conceptual terms. Wherever possible the available costs data are also used for empirical validation of analytical arguments. However, in India these data are not yet adequately documented. Nor are the experiences of group or area approach to agricultural financing adequately studied.