IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/23239.html
   My bibliography  Save this paper

Group Lending Scheme operating through Primary Agricultural Credit Society: A Critical Assessment

Author

Listed:
  • Amit, Kundu
  • Suranjana, Mitra

Abstract

The basic objective of the paper is to identify the effectiveness of group lending based microfinance programme operating through Primary Agricultural Credit Society to improve the economic condition among the rural participants in two blocks of Hooghly district in West Bengal. Here to do the impact study we have considered both Difference-in-Difference and First Difference Method with the help of longitudinal data and it is applied to minimize the possibility of selection bias during the time of drawing samples. It came out from field survey that very few marginal farmers had taken credit from their respective groups for agricultural purposes. Results reveal that there has been no significant impact of microfinance programme in terms of improvement of the outcome variables among the member households in spite of low interest rate charged on loans, high repayment rate within groups and small size of self-help groups. The reasons responsible are lack of skill-based training programmes for the members of groups and lack of marketing facilities to promote and sell the products produced by the members of self-help groups. The only positive aspect is the members can now protect themselves from the crunches of professional money lenders who charged exorbitant interest rates

Suggested Citation

  • Amit, Kundu & Suranjana, Mitra, 2010. "Group Lending Scheme operating through Primary Agricultural Credit Society: A Critical Assessment," MPRA Paper 23239, University Library of Munich, Germany, revised 10 Jun 2010.
  • Handle: RePEc:pra:mprapa:23239
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/23239/1/MPRA_paper_23239.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Karlan, Dean S. & Zinman, Jonathan, 2009. "Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila," Center Discussion Papers 52600, Yale University, Economic Growth Center.
    2. Xavier Gine & Dean Karlan, 2006. "Group versus Individual Liability: A Field Experiment in the Philippines," Working Papers 940, Economic Growth Center, Yale University.
    3. Coleman, Brett E., 1999. "The impact of group lending in Northeast Thailand," Journal of Development Economics, Elsevier, vol. 60(1), pages 105-141, October.
    4. Beatriz Armendariz & Jonathan Morduch, 2007. "The Economics of Microfinance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262512017, December.
    5. Ricardo Bebczuk & Francisco Haimovich, 2007. "MDGs and Microcredit: An Empirical Evaluation for Latin American Countries," CEDLAS, Working Papers 0048, CEDLAS, Universidad Nacional de La Plata.
    6. Coleman, Brett E., 2006. "Microfinance in Northeast Thailand: Who benefits and how much?," World Development, Elsevier, vol. 34(9), pages 1612-1638, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toshio Kondo & Aniceto Orbeta Jr. & Clarence Dingcong & Christine Infantado, 2008. "Impact of Microfinance on Rural Households in the Philippines," Development Economics Working Papers 22639, East Asian Bureau of Economic Research.
    2. Xavier Giné & Pamela Jakiela & Dean Karlan & Jonathan Morduch, 2010. "Microfinance Games," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 60-95, July.
    3. Dean Karlan & Jonathan Zinman, 2010. "Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts," Review of Financial Studies, Society for Financial Studies, vol. 23(1), pages 433-464, January.
    4. Hammler, Katharina, 2011. "Mikrokredite: Eine kritische empirische Bestandsaufnahme," Briefing Papers 6, Austrian Foundation for Development Research (ÖFSE).
    5. Maren Duvendack & Richard Palmer-Jones, 2012. "High Noon for Microfinance Impact Evaluations: Re-investigating the Evidence from Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 48(12), pages 1864-1880, December.
    6. Swain, Ranjula Bali & Varghese, Adel, 2009. "Does Self Help Group Participation Lead to Asset Creation?," World Development, Elsevier, vol. 37(10), pages 1674-1682, October.
    7. Jun Goto, 2013. "The Impacts of Self-Help Group Programs: Experimental and Survey Evidence from South India," Economics Bulletin, AccessEcon, vol. 33(4), pages 2874-2889.
    8. Hermes, Niels & Lensink, Robert, 2011. "Microfinance: Its Impact, Outreach, and Sustainability," World Development, Elsevier, vol. 39(6), pages 875-881, June.
    9. Martijn Boermans & Daan Willebrands, 2012. "Financial constraints, risk taking and firm performance: Recent evidence from microfinance clients in Tanzania," DNB Working Papers 358, Netherlands Central Bank, Research Department.
    10. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    11. Beck Thorsten & Büyükkarabacak Berrak & Rioja Felix K. & Valev Neven T., 2012. "Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-46, March.
    12. Debadutta Panda & Sriharsha Reddy, 2020. "Predictors of microcredit default in Indian self‐help groups," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(2), pages 303-318, June.
    13. Paramasivam Ramasamy & Umanath Malaiarasan, 2023. "Agricultural credit in India: determinants and effects," Indian Economic Review, Springer, vol. 58(1), pages 169-195, June.
    14. Mohamed Abdallah Ali & Mazhar Mughal & Dina Chhorn, 2022. "Microfinance and poverty reduction: Evidence from Djibouti," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 1189-1224, May.
    15. Deininger, Klaus & Liu, Yanyan, 2013. "Economic and Social Impacts of an Innovative Self-Help Group Model in India," World Development, Elsevier, vol. 43(C), pages 149-163.
    16. Seng, Kimty, 2019. "The Poverty-Reducing Effects of Financial Inclusion: Evidence from Cambodia," MPRA Paper 95726, University Library of Munich, Germany, revised 26 Aug 2019.
    17. Heiko Fritz & Guenter Lang, 2012. "Microcredit, Human Capital, and Personal Income Distribution: Empirical Evidence from Greater Cairo," Working Papers 30, The German University in Cairo, Faculty of Management Technology.
    18. Erhardt, Eva, 2017. "Microfinance beyond self-employment: Evidence for firms in Bulgaria," MPRA Paper 79294, University Library of Munich, Germany.
    19. Robert M Hirth & Daanish Pestonjee, 2016. "How Group Lending Affects Innovation: Evidence From Ethiopia," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-15, December.
    20. Gonzalez, Adrian, 2007. "Resilience of Microfinance Institutions to National Macroeconomic Events: An Econometric Analysis of MFI asset quality," MPRA Paper 4317, University Library of Munich, Germany.

    More about this item

    Keywords

    Microfinance; Self-help groups; Joint liability Credit Contract; Primary Agricultural Credit Society.;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:23239. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.