Volume : V, Issue : III, March - 2015

AGRICULTURE CREDIT: A CONCEPTUAL ANALYSIS

Bhupen Pathari

Abstract :

The new agricultural technology is usually capital intensive. The demand for farm credit has increased manifold in modern times and the supply of credit is not sufficient to meet the expanding credit needs of agriculture. The additional returns from the productive investment were expected to be substantially higher than that of additional cost incurred on it. Borrowers were expected to repay the loans along with interest due on it without any difficulties. The proper utilization of credit increases the agricultural production and consequently the repaying capacity of the borrowing farmer. However, if the credit is not utilized for the productive purposes, it fails to increase the rate of capital formation in agricultural sector. Like other credit markets, agriculture credit market also faced adverse selection and moral hazard problems in which lenders unable to observe or monitor of the behaviour of borrowers where increase in the risk of the borrowers’ ability to repay the loan.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Bhupen Pathari AGRICULTURE CREDIT: A CONCEPTUAL ANALYSIS Indian Journal of Applied Research, Vol.5, Issue : 3 March 2015

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