Agricultural financing through kisan credit card scheme in Thrissur district

Abstract

The study on ‘The Agricultural Financing through Kisan Credit Card Scheme in Thrissur district’ was undertaken with the following objectives. 1. To examine the procedural differences among various lending institutions in implementing the scheme of Kisan Credit Card. 2. To study the farmers’ behaviour towards the Kisan Credit Card Scheme. The study was conducted among three banks of Thrissur district viz., Canara bank, Federal bank and TDCB. The banks were having issued highest number of Kisan Credit cards in the year 2000-01. Branches of these banks were selected from highest amount of crop lending block i.e. Ollukkara block. A sample group of 50 card holders from each banks were selected for survey. Secondary data on procedural formalities of the banks were also used for the study. Statistical tools like percentages, averages, satisfaction index, priority index and bi-variate and multi-variate tables were used for analysis. The analysis on the first objective revealed that there are both similarities and dissimilarities in their formalities. In launching of Kisan Credit Card Scheme, objective, eligibility criteria of farmers, credit limit fixation, security and margin requirement, interest rate, repayment period, issue of cheque books and levying service charges could see many procedural differences among the banks. But in documentation, issue of cards, maintenance of accounts, monitoring mechanism and replacement of lost cards, their formalities are more or less similar. The study revealed that major reasons for selecting the branches were proximity to their residence followed by quality of their service. It was further observed that almost all the respondents agreed that expansion of their agricultural operations and to meet their working capital requirement were the major purpose of joining the scheme. The study again revealed that majority of card holders were the bank’s existing borrowers. Here the banks were inefficient to cater more number of farmers under the scheme. In case of credit utilization pattern of card holders, majority were sanctioned their credit limit above 90 percent of their applied amount. Almost all the farmers were utilizing about full amount of the credit. It was found that most of the farmers have repaid their credit within the time limit. Among the sample banks, TDCB showed comparatively better performance in the repayment. Only a small number of respondents were defaulting their repayment, mainly because of price fall and loan diversion. The study revealed that majority of farmers utilised below Rs. 25000 for agricultural purpose, because the dominance of small and marginal farmers in the scheme. A close observation of the scheme reveals that the respondents are satisfied with the performance of the scheme. The study emphasized that steps should be taken to provide proper extension service to farmers inorder to improve their productivity. The study again suggested that financing under the scheme in a compact area will be more effective than present unplanned scattered lending.