Professional Documents
Culture Documents
Introduction:
Finance is most essential for farmers. This finance can be secured from
various sources which can be classified into
(1) NON-INSTITUTIONAL (2) INSTITUTIONAL
INSTITUTIONAL SOURCES OF FINANCE
The share of institutional finance has increased substantially. Within this
sector, cooperative & commercial banks have been playing major roles in
agricultural credit.
The chart below brings out the
sources of institutional finance.
It can be noted that the co-operatives share has been declining over the
period. Share of RRI is negligible whereas share of commercial banks have improved
(1)CO-OPERATIVES BANKS :co-operative credit societies were established to provide rural credit at
a lower cost. By 2005, the cooperatives have covered 97% of the villages with
almost 900 lakh members. They provide short term & long term loan through credit
societies.
Short term credit structure is based on a 3-tier structure
(1)At the village level, the primary agricultural credit societies (PACs) provide credit
to the farmers. They form the lowest tier.
(2)At the second tier there are central co-operative banks
at the district level. They provide loans to PACs.
NABARD was setup in 1992. It is the apex bank for rural credit & development.
The share capital of NABARD was contributed by the government of India & RBI. It
has the objective of strengthening the credit structure for agriculture & rural
development.
(5)Kisan credit card :- It was introduced in 1998-99 to help farmers to get short
term credit.
Conclusion: Thus , NABARD has been playing a crucial role in the
channelization of bank credit to agricultural &rural development.