Where Do Our Financial Institutions Stand in Extending Agricultural Credit? Evidence from Kalahandi District, Orissa

Abstract

As the supply-led approach started to threaten the viability of financial institutions, the policy thrust since the 1990s shifted to making agricultural credit a viable activity. Jn this phase of agricultural credit policy, importance was given to achieving quantitative targets without neglecting the viability of the financial institutions. In this context, this paper examines the impact of the changing face of bank lending 011 the credit flow to agricultural borrowers in Kalahandi district of Orissa. it is observed in the stuc~y that credit rationing is widely practised by the bankers, and small and marginal farmers have been worse hit. They turn to informal sources. and are in the process subjected to exploitation in the interlocked credit markets. Access to institutional credit for small and marginal.farmei·s. therefore, continues to be an outstanding issue in rural credit markets, calling for appropriate programme and planning intervention.