Abstract

Background/Objectives: The agricultural crop loan has to help farmers for purchase of high yielding inputs. Thus, the present study was undertaken to analyse the utilization and diversion pattern of agriculture crop loan by different categories of farmers.

Methods/Statistical analysis: Multistage sampling technique was adopted for the selection of sample farmersviz. 40 large farmers and 20 small farmers who had availed agriculture crop loan from each commercial (SBI) and co-operatives banks (PACS). Thus, the total sample size consisted of 120 farmers. The technique of tabular presentation includes percentages and averages were used to estimate the extent of utilisation and diversion of agriculture crop loan.

Findings: The average amount utilized for the said purpose by large farmers was noticed around 96.97 per cent which was found to be higher as compared to small farmers (76.78 %) borrowed from commercial banks for red gram production. Similar trend was noticed in case of cooperative banks borrowers but the average size of amount borrowed was almost one half of the amount of commercial banks borrowers. The small farmers for cotton production from commercial banks the amount utilized for said purpose accounting for 85.72 per cent lower than large farmers (95.51 %). Similar trend was noticed in case of cooperative banks borrowers. It is of interesting to note that across institutions the diversion of agriculture crop loan was more in case of small farmers as compared to large farmers in both commercial and co-operative banks for both redgram and cotton production. The size of crop loan amount disbursed by cooperative banks borrowers was almost one half of the amount of commercial banks borrowers.

Application/Improvements: Hence, financial institutions should also educate the farmers in utilizing of crop loan amount while disbursing the loan to the farmers.

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