Multi-objective two-level planning for extending banking facilities to rural areas

Abstract

This dissertation develops multi-objective two level planning methodologies for the problem of extending banking facilities to rural areas. An investigation of the existing banking spread reveals that the spread had taken little cognizance of the overall of agricultural development in districts but seems to have taken place in favour of urbanization industrialization and cultivation of cash-crop like cotton. A hierarchy of objectives for banking operations in rural areas is developed; and from it using the finding of the above mentioned banking investigation and other studies a model of objectives relevant to the extension planning problem is constructed. Three two –level (district and national) planning models which consider both social and economic objective are developed for the problem. Model I based upon a “satisficing” approach aims to reduce the inter-district disparities in banking spread (a social objective) as well as to improve the concordance between the spread and agricultural development (an economic objective). Model II which is a mix of satisficing and optimizing approaches has two objectives: i) to maximize the expected agricultural credit disbursement (an economic objective) and ii) to maximize the gross cropped area coverage of the bank branches (a social objective). The model has been advanced as a part of a methodology which is suggested for integrating credit planning with branch extension planning. Model III which is again a mixed approach replaces the first objective of model II ( in case the credit estimation is not possible ) with the objective of maximizing the irrigated area coverage and the quality ( a measure of the development of other facilities ) of centers. Four heuristic methods including one interactive algorithm are development and tested to solve the formulation of model II/III at the district level and a two objective dynamic programing interactive algorithm is suggested for the national level. Result of application in two selected districts show that the conflict among the objective as well as gains from planning is significant.