Challenges and changes in Indian rural credit market: a review

2019 ◽  
Vol 79 (3) ◽  
pp. 338-352 ◽  
Author(s):  
Sougata Ray
Keyword(s):  
Structural Changes ◽  
State Level ◽  
Credit Market ◽  
National Sample ◽  
Sample Survey ◽  
Valuable Insight ◽  
Content Type ◽  
Rural Credit ◽  
The Government ◽  
Rural Credit Market

Purpose Post-independence, the rural credit market in India has undergone significant structural changes in order to enhance the availability and efficient use of credit. The purpose of this paper is to understand the challenges and changes in the Indian rural credit market in the post-independence period. Design/methodology/approach Using data from the All India Debt and Investment Survey conducted by the National Sample Survey Organisation of the Government of India from 1971–1972 to 2012 and Reserve Bank of India in 1951–1952 and 1961–1962, the study focuses on three important aspect of rural credit market, i.e. the availability, sources and uses of credit. The analysis is based on both the national and state level data and uses the decadal growth rates to explain the changes in the rural credit market. Findings Availability of credit, in terms of volume and number of households indebted, has increased substantially. However, the sharp rise in outstanding debt is a matter of concern. The share of credit from institutional agencies has seen a continuous decline post liberalisation. The non-institutional agencies, particularly the professional moneylenders, continue to be the most preferred sources of credit owing to their flexible nature of operation. Interesting, microfinance has emerged as a major source of credit particularly for the poor rural households. The rise in credit usage for non-income generating activities amongst poor households is another important concern. Originality/value The study highlights some of the most important features and characteristics associated with the Indian rural credit market. An understanding of these issues would provide valuable insight for shaping the future policy responses.

scholarly journals Do Institutional Transplants Succeed? Regulating Raiffeisen Cooperatives in South India, 1930–1960

2021 ◽  
pp. 1-27
Author(s):  
Maanik Nath
Keyword(s):  
South India ◽  
Financial Regulation ◽  
Low Cost ◽  
Credit Market ◽  
Rural Credit ◽  
Market State ◽  
The Government ◽  
Political Economic ◽  
Rural Credit Market

The government in British-ruled India established cooperative banks to compete with private moneylenders in the rural credit market. State officials expected greater competition to increase the supply of low-cost credit, thereby expanding investment potential for the rural poor. Cooperatives did increase credit supply but captured a small share of the credit market and reported net losses throughout the late colonial and early postcolonial period. The article asks why this experiment did not succeed and offers two explanations. First, low savings restricted the role of social capital and mutual supervision as methods of financial regulation in the cooperative sector. Second, a political-economic ideology that privileged equity over efficiency made for weak administrative regulation.

scholarly journals Impact of different sources of credit in creating extreme farmer distress in India

2019 ◽  
Vol 26 (6) ◽  
pp. 1676-1691 ◽  
Author(s):  
Bhavna Pandey ◽  
Prabir Bandyopadhyay ◽  
Alain Guiette
Keyword(s):  
Financial Institutions ◽  
Rural Areas ◽  
Statistical Tests ◽  
Reliability And Validity ◽  
State Intervention ◽  
National Sample ◽  
Sample Survey ◽  
Significant Information ◽  
Content Type ◽  
The Government

Purpose According to the published report by the National Sample Survey 2014 the data says that the incidence of indebtedness among households in the rural areas of Maharashtra, India, is almost twice that of other rural places in India. Around 64 percent of rural households are indebted in Maharashtra as against 31 percent other households in India. The purpose of this paper is to examine which source of credit is creating more distress among the farmers. Further the researchers also wanted to find out the reasons why the farmers choose private moneylender over the formal financial institutions. Design/methodology/approach To achieve the objective, the authors used the mixed method methodology. The qualitative study was done using the ethnography approach .In depth interviews were conducted and coded accordingly to find out the themes. The interviews conducted were semi structured and had open ended questions in it, followed by a structured questionnaire. Different statistical tests were also applied on the responses obtained from the questionnaire to check the reliability and validity of the interviews. This methodology gave a robustness to the findings of the study. Findings The results show that sources of loan play a major role in causing farmer distress in Maharashtra. The findings also show major reasons like grapevine bureaucracy, lengthy documentation, etc. as the major reasons for choosing private lenders over the formal financial institutions. The most interesting finding of the study was a phenomena observed during the field study. The borrowers first borrow from financial institutions for their credit needs, when they fail to repay the debt borrowed they again borrow money from the private money lenders and with this borrowed money they try repaying a part of the old existing loan in order to make themselves eligible for the next loan cycle. Research limitations/implications The limitation of the study is that due to time constraint only two districts with high number of farmer suicide could be visited. Given more time and fund a comparative study can be done among different states of India. Practical implications This study will help the policy makers in identifying the real cause of farmer distress. The motive behind the policies made by the government is very noble but the implementation of these policies is inadequate and without a strong research base. The paper will be able to highlight how much the state intervention is required at multiple levels in order to ensure that the benefits reaches to those who deserve it. Social implications It is imperative that we have yet not realized the gravity of the situation where people belonging from a community which is so essential to the economy are killing themselves because of lack of money. This is not just about the fact that the people who give us food are unable to access food themselves. Originality/value The paper contains significant information with regard to indebtedness. It focuses on the issue troubling the authorities the most. It provides the ground realities of the incidence of indebtedness in Maharashtra, one of the most distressed states of India. Lot of studies have been done in the past but very few studies have used mixed methodology to study this incidence of debt among the farmers of Maharashtra. This study also unveils a new phenomena of borrowing happening among the farmers of Maharashtra.

Information asymmetries and agricultural credit

2019 ◽  
Vol 79 (2) ◽  
pp. 217-233 ◽  
Author(s):  
Luis Felipe Zegarra
Keyword(s):  
Legal System ◽  
Credit Market ◽  
Primary Sources ◽  
Information Asymmetries ◽  
Agricultural Credit ◽  
Content Type ◽  
Access To Credit ◽  
Rural Credit ◽  
Collateral Evidence ◽  
Rural Credit Market

Purpose The purpose of this paper is to analyze the functioning of the rural credit market of Lima from 1825 to 1865, paying special attention to the effect of information asymmetries on the access to rural credit. Design/methodology/approach The article relies on primary sources for the study of the early credit market of Lima. In particular, the study relies on a sample of notarized loans for 1825–1865 and on property tax reports, collected from the National Archives of Peru, to determine the effect of information asymmetries, collateral and regional lending on access to credit. The article also analyzes the legal system of Peru during this period to determine whether property rights were well protected and so collateral could be used in the rural credit market. Findings A revision of the legislation shows that the legal system had some deficiencies, but allowed landlords and tenants to use their assets as collateral. Tax reports show that landlords and tenants owned valuable capital that could be used as collateral. Evidence from notarized loans shows that information asymmetries severely restricted inter-regional lending. In Lima, however, notaries played a role as financial intermediaries, providing the information about potential borrowers and allowing landlords and tenants to access credit. As a result, access to credit was significant for landlords and tenants. Originality/value This paper is one of the few historical studies on the role of information asymmetries in the allocation of rural credit in Latin America. It contributes to our understanding of credit markets prior to the creation of banks.

Build back better concepts for resilient recovery: a case study of India’s 2018 flood recovery

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shankar Neeraj ◽  
Sandeeka Mannakkara ◽  
Suzanne Wilkinson
Keyword(s):  
Local Level ◽  
State Level ◽  
Recovery Process ◽  
Decision Makers ◽  
Community Recovery ◽  
Content Type ◽  
Effective Implementation ◽  
The Government ◽  
Post Disaster

Purpose This paper aims to understand the recovery process after the 2018 floods in Kerala, India, and it determines whether the recovery efforts were aligned with Build Back Better (BBB) concepts. Design/methodology/approach A qualitative approach was adopted to collect the data from the officials of Government and NGOs involved in Kerala recovery. The participants were interviewed on the challenges faced during the recovery process and the actions taken by them to overcome it. Findings The study identified that the Kerala Government was proactive at making the community resilient from future disasters by – encouraging owner-driven reconstruction among flood-affected households; supporting locals to rejuvenate their business; and by creating a local-level recovery authority. Further, this paper identifies the areas that Kerala was lacking in terms of BBB and where resilience-based plans and actions are needed for the future. Research limitations/implications The participants were employees of Government and NGOs at a state level as they were the primary decision-makers to implement any recovery actions. Researchers believe that the authorities at district and village level could have had a different perspective towards implementing the recovery actions. Practical implications The best practices presented in this paper for effective BBB will assist the government to build/improve resilience in the community. Originality/value The implementation of BBB concepts in the areas of disaster risk reduction, community recovery and effective implementation was never studied extensively. The research provides valuable information on what extent Kerala’s post-disaster recovery and reconstruction activities were in-line with BBB practices.

State, Market and Social Inequalities: A Study of Primary Education in the Indian Punjab

2017 ◽  
Vol 8 (2) ◽  
pp. 194-216
Author(s):  
Angrej Singh Gill
Keyword(s):  
Primary Education ◽  
Social Inequalities ◽  
National Sample ◽  
The State ◽  
School Education ◽  
Sample Survey ◽  
Government Schools ◽  
Education Market ◽  
The Government ◽  
And Gender

The article, using the National Sample Survey (henceforth NSS) data, establishes that the non-state providers, particularly the private-unaided sub-sector, have predominantly captured the primary school education market in Punjab. The predominance of these schools in the state has made the primary education a tradable commodity, catering to the demands based on the ability of the households to pay. In such a situation, the type of school (government or private) the households in the state are able to choose for their wards, particularly at rural level, is largely contingent on their caste and gender, which clearly shows that a new form of social inequality has emerged in Punjab (given not only that the learning environment in the government schools is perceived to be of formidable concern, but these schools are also non-English medium). The article suggests that without a properly functional state-financed school education system, the market forces will continue to strengthen the prevailing social inequalities.

Gender equality will see uneven progress in Mexico

2016 ◽  
Keyword(s):  
Gender Equality ◽  
Gender Gap ◽  
National Development ◽  
State Level ◽  
Content Type ◽  
Development Goals ◽  
The Government ◽  
Employment Of Women ◽  
First Time

Subject The Mexican government's advances towards greater gender equality. Significance President Enrique Pena Nieto has been active in promoting gender equality at home and abroad, and his government has repeatedly voiced its commitment to the UN's Millennium Development Goals, particularly regarding female empowerment. The Pena Nieto administration included a gender dimension in its National Development Plan for the first time, and has allocated significant resources to supporting women. Efforts have focused not only on the federal level, but also at state level, as illustrated by the signing of a collaboration agreement in December 2015 between the government and the National Conference of Governors. Impacts Bridging the gender gap across all government levels will be an expensive and difficult task, with uneven success across the country. Any reductions in domestic violence rates will require long-term efforts to change attitudes from the bottom up. Quotas that encourage the employment of women, regardless of merit, may perpetuate politics' reputation for being corrupt and nepotistic.

Economy will be Modi’s personal focus

2019 ◽  
Keyword(s):  
Prime Minister ◽  
National Sample ◽  
General Election ◽  
Sample Survey ◽  
Gdp Growth ◽  
Illegal Migration ◽  
Content Type ◽  
National Sample Survey ◽  
Central Statistics Office ◽  
Central Statistics

Subject Modi's post-election cabinet appointments and likely policy trajectory. Significance Following a landslide victory in the general election, Prime Minister Narendra Modi last week announced his new cabinet. There were new appointments at the head of the defence, foreign, home and finance ministries. Impacts The merger of the Central Statistics Office and National Sample Survey Office could further undermine trust in India’s GDP growth figures. If a crackdown on ‘illegal’ migration alienates neighbouring ally Bangladesh, Dhaka could draw closer to Delhi’s rival Beijing. Modi’s alliance will likely have a majority in the parliamentary upper house by 2021.

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