Repayment Performance of Agriculture Credit by Farm Households

What is it about?

The study was undertaken in North of Bengaluru to Assess the Repayment performance and factors affecting repayment capacity of agriculture credit by farm households across rural urban interface. The required primary data was collected from randomly selected 50 farmers each under rural, peri-urban and urban transacts. The results revealed that the farmers availed more credit from formal sources compared to informal sources across all transacts. Repayment was more in urban areas (50.36 %) compared to peri-urban (43.05 %) and rural (34.52 %) areas. The farmers were categorized based on the extent of repayment across rural urban interface and the results indicated that, 42 per cent of rural farmers, 40 per cent of peri urban and 34 per cent of urban farmers fall under the category of 75 to 100 per cent repayment. Low price, crop loss and higher household expenditure occupied the major reasons for indebtedness of farm households in all the three transacts. Multiple regression analysis was carried out to know the factors affecting repayment capacity and regression results showed that Amount borrowed and interest rate were the factors which significantly affected the repayment capacity of farm households.

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Why is it important?

Agriculture credit