ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Rural Credit Delivery: Performance and Challenges before Banks

Development of the rural credit delivery system in the country has metamorphosed from monopoly of cooperatives to the induction of commercial banks and establishment of regional rural banks for improving the outreach and ensuring access to credit in rural areas. With the implementation of financial sector reforms, the accent is on ensuring the financial health of the system. Innovations in rural credit delivery had an impact on agricultural production and reduction of poverty due to increased flow of credit. Accelerating the pace of capital formation in agriculture, infrastructure development with focus on transportation and marketing, ensuring credit discipline will enable the rural sector to absorb more credit from institutional sources. The focus should be on strategies that are required for tackling issues such as sustainability and viability, operational efficiency, recovery performance, small farmer coverage and balanced sectoral development.

Gearing Rural Credit for the Twenty-First Century

Twenty-First Century K P Agrawal V Puhazhendhi K J S Satyasai The task before the rural credit system in the next century will be formidable and complex as it has to deal with two diverse challenges, namely, addressing the basic problems of rural development and globalising Indian agriculture. Thus it has to deal with two distinct clientele groups: one having small individual credit needs but accounting for a high proportion of total credit needs and the other requiring huge amounts of credit for practising capital-intensive, export-oriented hi-tech agriculture. The existing credit system has to be geared to these challenges.
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