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Co-operative Credit Delinquency: Identification of Factors Discriminating Defaulters

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  • Justin, Nelson Michael

Abstract

Co-operative movement dawned in India a century ago to eradicate indebtedness and to accelerate agricultural production in India. Co-operatives are eminently suited to achieve social, economic changes in rural India. However, credit risk is acute in co-operative credit system, predominantly manifested in short-term credit. Delinquency of co-operative credit is the object of enquiry for many committees and researches. Mounting overdues at the level of Primary Agricultural Co-operative Banks (PACB) contribute to the accumulation of Non-performing Assets (NPA) in the Central Co-operative Banks (CCB). Willful default has been identified as the main reason for mounting overdues. This empirical study of defaulters of co-operative credit has examined the factors discriminating default of co-operative credit, which subsequently increase NPA. Univariate Analysis and Discriminant Function analysis was carried out to identify the factors. Such identification of factors discriminating credit default is crucial to reduce credit delinquency in co-operative credit system.

Suggested Citation

  • Justin, Nelson Michael, 2010. "Co-operative Credit Delinquency: Identification of Factors Discriminating Defaulters," MPRA Paper 29508, University Library of Munich, Germany, revised 28 Feb 2011.
  • Handle: RePEc:pra:mprapa:29508
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    More about this item

    Keywords

    credit risk; credit delinquency; co-operative credit; willful default;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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