Measuring Sustainable Effectiveness of Credit Financing Schemes through Risk Evaluation:A Review

Risk and uncertainty are inevitable aspects of the sustainability problem as they are often neglected in the sustainability discourse, especially in the economic analysis of sustainable development. It has been argued that it deprives the sustainability discourse from the link between risk and policy making. The paper attempts to provide a tool for the effectiveness assessment of agricultural financing schemes through individual risk behaviour domains with perceived effectiveness. The study has an inert contribution, as all researchers have assessed effectiveness through its successor aspects but this study evaluates it from predecessor aspects in view of various risk domains. In this regard, recent work by Weber et al., (2002) suggests that such apparent domain differences in risk taking have more to do with situational and domain-related differences in the perception of risk than with attitudes toward risk. The study has two fold contributions in policy formulation as it provides a tool for evaluating risk factors related to agricultural credit financing in particular and credit financing in general. Secondly, it provides a methodology for evaluating the effectiveness of credit schemes. Hence, evaluates individual from psychological perspective and scheme/policy from effectiveness perspective. At the end an attempt has been made to provide a tool for sustainable financing policy with maximum benefits and minimum losses through a trade-off between individual and policy.