Determinants Influencing a Rural Household's Preference to Join Individual Liability or Joint Liability Micro Credit Contract Operated by Primary Aagricultural Credit Society
AbstractAgriculture credit which is one form of micro credit mainly for the small and marginal farmers can be borrowed under two different types of short-term credit contracts: individual liability credit contract or joint liability credit contract under Primary Agricultural Credit Society (PACS). The basic objective of this paper is to identify the factors which influence a rural household to link himself directly with PACS for credit contract under individual liability micro credit contract or to take the initiative to join self-help group under PACS so that if required he/she can take credit under joint liability credit contract. Results reveal that higher education level and age reduces the probability of a rural people to join self-help group but aged farmers with certain size of land prefers to take credit under individual liability loan contract after taking direct membership of PACS. But ownership of land and its size is not a decision making factor during the time of formation self-help groups under PACS. Actually poor people with zero or small size of assets i.e. mainly the risky type borrowers were not ignored during the time of group formation.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 21784.
Date of creation: 07 Mar 2009
Date of revision: 10 Oct 2009
Publication status: Forthcoming in Microfinance Review July-Dec, 2009.2(2010): pp. 45-56
Agricultural credit; Micro credit; Individual liability; Joint liability; Primary Agricultural Credit Society;
Find related papers by JEL classification:
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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