Advanced Search
MyIDEAS: Login to save this paper or follow this series

Institutional Credit through Cooperatives in Maharashtra: A Region-wise Analysis

Contents:

Author Info

  • Shah, Deepak

Abstract

In the era of financial sector reforms, sustainability, viability and operational efficiency of rural financial institutions (RFIs) are the major issues that need to be taken cognizance of in ensuring effective rural credit delivery system. However, the major problems plaguing the efficiency of rural credit delivery system are the mounting overdue and Non Performing Assets (NPAs) of RFIs. In the state of Maharashtra, the credit cooperatives have not only shown slower growth in their institutional finance coupled with much slower growth in their membership but also faster growth in outstanding loans as against their loan advances during the reform period. The reason for this dismal scenario can be associated with adverse environment created by the financial sector reforms, which have reduced the entire rural credit delivery through cooperatives to a moribund state. The financial sector reforms have accorded greater flexibility to cooperatives to invest in non-target avenues like shares and debentures of corporates, units of mutual funds, bonds of public sector undertakings, etc. This has affected credit flow from these major institutions operating in rural Maharashtra as most of their loans meant for farm finance are diverted to investments. The estimates of this study also show not only wide variation in total and crop loan advances of PACS but also their outstanding loans, overdue and per member borrowing across different regions of Maharashtra. The outstanding loan of PACS based on per hectare GCA is seen to have exceeded loan advances with a comfortable margin in all the regions of the state. Although increase in outstanding loan with rise in loan advances and GCA is another issue, the most important one among all is the mounting overdue and NPAs of cooperatives that sets a path where from there is no return and, which ultimately leads to inefficiency in cooperative credit delivery. In order to rejuvenate rural credit delivery system through cooperatives, the major problems facing the system, viz., high transaction cost, poor repayment performance, mounting NPAs, distributional aspect of credit, coverage of various social groups, etc., need to be tackled with more fiscal jurisprudence reserving exemplary punishment for willful defaults, particularly large farmers. In fact, insofar as the rural credit delivery system is concerned, the focus should be on strategies that are required for tackling issues such as sustainability and viability, operational efficiency, recovery performance, small farmer coverage and balanced sectoral development.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/7140/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7140.

as in new window
Length:
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:pra:mprapa:7140

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Institutional Credit Cooperatives Region-wise Analysis;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:7140. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.