A colossal rise in agri credit

A study by 3 academics on the impact of bank credit for agricultural sector reveals very encouraging trend:

A recent study to assess different types of loans available to farmers and the ratio of institutional credit to output for agriculture in India has revealed that the credit to agricultural sector increased from 462.68 billion in 1999-2000 to 18.63 trillion in 2023, which represents an annual growth of 19.5%. In financial year 2022, the study found the ratio of institutional credit provided to the total output in agriculture at 1.28, meaning the credit given was greater than half of the total output obtained in the fiscal year.

The study also found that in 2021 loans having interest rates of 4% -5% got the highest disbursal. In 2023, as much as 75% of the total loan disbursal are higher rate loans (more than 7%) and lower rate loans got very less disbursal.

The study titled 'A Study on Financing of Agriculture by Banks in India' was done by 3 academics of Biju Patnaik University of Technology, Rourkela - Prakash Pradhan, Research Scholar, Dr Shakti Ranjan Mohapatra, Dean - Management, and Dr Deepak Kumar Sahoo, Ex-Director Examinations, and was published in the Journal of Informatics Education and Research.

VARIETY OF LOAN PACKAGES

The study says a variety of loan packages are available from a few Indian banks to help farmers purchase necessary inputs including machinery, fertilizers, seeds and pesticides. These loans are frequently given out on favourable terms, with adjustable payback plans that take into account the cyclical nature of farming operations.