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Assessing the impact of lending through Kisan Credit Cards in rural India: Evidence from eastern India

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  • Kumar, Anjani
  • Sonkar, Vinay Kumar
  • S., Aditya K.

Abstract

This paper attempts to identify the determinants of access to the KCC program and empirically evaluate its impact on farmers’ use of agricultural inputs and farm household incomes in Eastern India. We have also examined whether the possession of KCC reduces the farmer’s dependence for borrowing on moneylenders. The estimation is based on Coarsened Exact Matching (CEM) approach, which is an increasingly popular method of estimating causal effects. The study uses a large survey of rural/farming households in eastern India (Bihar, Eastern Uttar Pradesh, Jharkhand, Odisha, and West Bengal). Findings reveal that access to KCC is strongly associated with the socioeconomic and demographic characteristic of farming households. We find that access to KCC increases farmers’ use of the agricultural inputs and households and farm income especially for marginal and small farmers. Finally, access to KCC reduces farmer’s dependency on moneylenders for borrowing credits by 25 percent.

Suggested Citation

  • Kumar, Anjani & Sonkar, Vinay Kumar & S., Aditya K., 2021. "Assessing the impact of lending through Kisan Credit Cards in rural India: Evidence from eastern India," IFPRI discussion papers 1997, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1997
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    References listed on IDEAS

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    1. Dean Karlan & Robert Osei & Isaac Osei-Akoto & Christopher Udry, 2014. "Agricultural Decisions after Relaxing Credit and Risk Constraints," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 597-652.
    2. Singh, Harpreet & Sekhon, M.K., 2005. "Cash-in Benefits of the Kisan Credit Card Scheme: Onus is Upon the Farmer," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 60(3), pages 1-16.
    3. Collins Asante-Addo & Jonathan Mockshell & Manfred Zeller & Khalid Siddig & Irene S. Egyir, 2017. "Agricultural credit provision: what really determines farmers’ participation and credit rationing?," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 77(2), pages 239-256, July.
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    5. Datta, Nirupam, 2015. "Evaluating Impacts of Watershed Development Program on Agricultural Productivity, Income, and Livelihood in Bhalki Watershed of Bardhaman District, West Bengal," World Development, Elsevier, vol. 66(C), pages 443-456.
    6. Aditya, K.S. & Jha, Girish K. & Sonkar, Vinay K. & Saroj, Sunil & Singh, K.M. & Singh, R.K.P., . "Determinants of access to and intensity of formal credit: evidence from a survey of rural households in eastern India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 32(Conferenc).
    7. Stefano Iacus & Gary King & Giuseppe Porro, 2008. "Matching for Causal Inference Without Balance Checking," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1073, Universitá degli Studi di Milano.
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