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Factors Affecting Small Farmers' Access to Institutional Credit in Rural Orissa, India

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  • Kailas Sarap

Abstract

This study uses original survey data from six villages to locate and analyse factors inhibiting small farmers' access to formal credit, including credit supply, bargaining strength, bureaucratic formalities, asset‐based lending policies, informal tenancy contracts, extended processing procedures and caste barriers. The survey data confirm a correlation between higher overall transaction costs and smaller farm size, and also between arrearages and larger farm size. The analysis leads to the suggestion that policies should be directed both towards reducing the overall transaction costs of formal loans to small farmers, and towards improved collection processes.

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  • Kailas Sarap, 1990. "Factors Affecting Small Farmers' Access to Institutional Credit in Rural Orissa, India," Development and Change, International Institute of Social Studies, vol. 21(2), pages 281-307, April.
    • Handle: RePEc:bla:devchg:v:21:y:1990:i:2:p:281-307
    DOI: 10.1111/j.1467-7660.1990.tb00378.x
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    Cited by:

    1. Chaudhuri, Sarbajit & Gupta, Manash Ranjan, 1996. "Delayed formal credit, bribing and the informal credit market in agriculture: A theoretical analysis," Journal of Development Economics, Elsevier, vol. 51(2), pages 433-449, December.
    2. Gagan Bihari Sahu & D Rajasekhar, 2017. "'Urban Bias' in the Flow of Funds and Deposit Mobilisation: Evidence from Karnataka, India," Working Papers id:12045, eSocialSciences.
    3. Muhammad Irshad Ahmad & Les Oxley & Hengyun Ma, 2020. "What Makes Farmers Exit Farming: A Case Study of Sindh Province, Pakistan," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    4. Dufhues, Thomas & Buchenrieder, Gertrud, 2005. "Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam," Research in Development Economics and Policy (Discussion Paper Series) 8535, Universitaet Hohenheim, Department of Agricultural Economics and Social Sciences in the Tropics and Subtropics.
    5. Anita Gill, 2006. "Interlinked Agrarian Credit Markets in a Developing Economy: A Case Study of Indian Punjab," Working Papers id:760, eSocialSciences.
    6. Gagan Bihari Sahu, 2005. "‘Urban Bias’ in the Flow of Funds and Deposit Mobilisation:Evidence from Karnataka, India," Working Papers id:276, eSocialSciences.
    7. Fujin Yi & Richard T. Gudaj & Valeria Arefieva & Renata Yanbykh & Svetlana Mishchuk & Tatiana A. Potenko & Jiayi Zhou & Ivan Zuenko, 2020. "Chinese Technology Transfer to Local Farmers in the Russian Far East," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(5), pages 1483-1509, November.
    8. Anubhav Agarwal & Shubhangi Kumar, 2020. "Interest rate subvention in Indian agriculture: A demand-side analysis and proposed alternatives," ASARC Working Papers 2020-02, The Australian National University, Australia South Asia Research Centre.
    9. Gupta, Manash Ranjan, 1997. "Informal sector and informal capital market in a small open less-developed economy," Journal of Development Economics, Elsevier, vol. 52(2), pages 409-428, April.
    10. Sunil Sangwan & Narayan Chandra Nayak, 2019. "Do outreach approaches differ between Self-Help Group-Bank Linkage and Microfinance Institution-based microfinance? Evidences from Indian states," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 21(1), pages 93-115, June.
    11. Dufhues, Thomas & Buchenrieder, Gertrud & Munkung, Nuchanata, 2012. "Individual social capital and access to formal credit in Thailand," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123401, International Association of Agricultural Economists.
    12. Lahkar, Ratul & Pingali, Viswanath, 2016. "Expansion and welfare in microfinance: A screening model," Economic Modelling, Elsevier, vol. 53(C), pages 1-7.
    13. Wittawat Hemtanon & Christopher Gan, 2020. "Microfinance Participation in Thailand," JRFM, MDPI, vol. 13(6), pages 1-27, June.
    14. Mao, Hui & Zhou, Li & Ying, RuiYao & Pan, Dan, 2021. "Time Preferences and green agricultural technology adoption: Field evidence from rice farmers in China," Land Use Policy, Elsevier, vol. 109(C).
    15. Bina Agarwal & Ankush Agrawal, 2016. "To farm or not to farm? Indian farmers in transition," Global Development Institute Working Paper Series 012016, GDI, The University of Manchester.
    16. Kumar, Sunil Mitra, 2013. "Does Access to Formal Agricultural Credit Depend on Caste?," World Development, Elsevier, vol. 43(C), pages 315-328.
    17. Rajesh Raj S. N. & Subash Sasidharan, 2018. "Does the Caste of the Firm Owner Play a Role in Access to Finance for Small Enterprises? Evidence from India," The Developing Economies, Institute of Developing Economies, vol. 56(4), pages 267-296, December.

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