Is inadequacy of institutional credit a problem in changing agriculture
Abstract
An earlier study had indicated that farmers ten l to suibstitute commercial bank credit for their own
futnds and/or for other sources of finance, and that this substitution has no significant impact on frmi
production.
This article is therefore based on the connected question: "Is inadequacy of the existing institui
tional credit facilities a problem in changing agriculture?". Tho question is important because of the
widespread not.ion that inadequacy of credit is a serious bottleneck in the adoption of the new
technology.
The second study indicates that the existing availability of uw()rking capital, including credit, with
the sample farmers is not inadequate to meet the requirements of technological changes in agriculture.
There does, however, exist significant scope for the reallocation of existing credit facilities, WVithdrawal
of institutional credit from farmers who have adequate owned resources and its provision to the
needy' farmers would greatly increase efficiency of credit use.
In fact, credit management involves proper scrutiny of individual loans and an emphasis by credit
suppliers on their own developmental role. With a proper understanding of the developmental role and
efficient allocation of credit, much could be achieved even with the existing resources of institutional
finance.
Collections
- Journal Articles [3685]