M J Bhende This study analyses aspects of rural financial markets in three villages of three agroclimatic zones of peninsular South India. In the Andhra Pradesh village private moneylenders are an important source of credit, whereas in the Maharashtra village co-operative societies and land development banks play an important role. Institutional credit is concentrated in the richer households having large farm and family size, and headed by more educated, older heads. On the other hand, those households who farmed more land but were less educated, and had fewer livestock and more irrigated area relied more heavily on informal credit. Borrowers usually succeed in diverting credit from the stipulated purpose to others. The largest defaulters are those households who have borrowed most from institutional sources. Relatively, households with larger families and higher dependencv ratios are more care to default.
