IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Inadequacies of Institutional Agricultural Credit System in Punjab State

Listed author(s):
  • Singh, Sukhpal
  • Kaur, Manjeet
  • Kingra, H.S.
Registered author(s):

    In spite of various measures to rejuvenate farm credit, the flow of credit to agriculture sector remained inadequate quantitatively and qualitatively. The study is based on a random sample of 600 farm households covering 11 districts in Punjab, comprising 107 marginal, 150 small, 53 semi-mediums, 87 medium and 103 large farmers and pertains to the year 2005-06. The total debt per sample farm household from both institutional and non-institutional sources has been found to be Rs 178934 in the year 2005-06. The institutional sources have contributed about 62 per cent to the total debt and non-institutional 38 per cent. Although the institutional credit has increased rapidly in recent years in Punjab, it still lacks behind the productive needs of the farmers in Punjab. A farmer on an average has to incur Rs 4016 for obtaining a loan from commercial banks, which amounts to 5 per cent of the total loan obtained by him. In the case of cooperatives, the transaction cost has been worked out to be 1.2 per cent of the loan and the cooperatives are located right in the villages. About 59 per cent farmers have reported the procedure to get loans from the institutional agencies to be complicated and time-consuming. On the contrary, availing non-institutional loan has been found easy and is the reason of preference given by 51 per cent farmers to it. Policy implications include issuing of a simple but comprehensive record book to farmers containing information relating to his land record and institutional transactions; computerization of land records by the state government; simplification of loan application form; and maintenance of proper records of loan applications and making disbursement of loan mandatory.

    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:
    Download Restriction: no

    Article provided by Agricultural Economics Research Association (India) in its journal Agricultural Economics Research Review.

    Volume (Year): 22 (2009)
    Issue (Month): 2 ()

    in new window

    Handle: RePEc:ags:aerrae:57467
    Contact details of provider: Web page:

    More information through EDIRC

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

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

    When requesting a correction, please mention this item's handle: RePEc:ags:aerrae:57467. 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: (AgEcon Search)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.