Determinants of rural credit in India: evidence from a large-scale sample survey

Purpose - The present study examines the determinants of households’ access to agricultural credit through institutional and non-institutional sources. The study evaluates the role of gender of the borrowers in accessing credit in rural India. Further, the paper also studies the impact of institutional variables in determining rural households’ access to credit. Design/methodology/approach - The study used a multinomial logit model to identify the different factors that determine a farmer’s access to different credit sources. Findings - The study reveals that substantial proportions of rural households do not access credit through any of the sources and the situation is very grim for the female-headed households (FHHs). The study highlights the importance of demographic, farm and institutional variables in determining households’ access to credit. Institutional variables significantly enhance rural credit access but favor male-headed households (MHHs). It highlights the need for policy intervention to target the specific needs of female borrowers. Further, the study also highlights the importance of adequate credit policy measures to address farmers’ vulnerability to natural disasters, mainly droughts. Originality/value - The results of the study are based on recent unit-level data from the 77th Round of the National Sample Survey Organization (NSSO) survey. The survey covers a large number of farm households and reports information for the year 2018–2019. Peer review - The peer review history for this article is available athttps://publons.com/publon/10.1108/IJSE-08-2022-0552