Linkages between land records-driven property rights and access to credit for agriculture: Evidence from India

Abstract

In India, vast land ownership in rural areas provides a vital option of land collateralisation in acquiring credit from formal financial institutions. However, the poor land record management in the country can pose to be an impediment for efficient credit creation through land collateralisation. The efforts in the direction of land record management and digitisation have picked up in rural India and can have positive implications for the agriculture sector which is the main source of livelihood in rural India, by facilitating the loan disbursement for agriculture purpose. In the light of land record management efforts in rural India, this paper attempts to assess the possible impact of these initiatives on the credit outflow from commercial banks in a few selected States of India that have claimed to make successful efforts towards the land record digitisation. This paper further sheds light on the possible linkages among land administration policies like land record management and land leasing laws in facilitating the credit outflow from banks for agriculture improvement, which is reflected in improved agriculture indicators.