NEED /TYPES

ON basis of TIME

• Short term (< 15 months)

• Medium term (15 months to 5
years)
• Long term (> 5 years)
 NEED /TYPES
ON basis of PURPOSE

• Productive.
• Consumption needs.
• Unproductive.
 Constraints To Financial
Services
• Cheap , Adequate and Timely
supply.
• Small Farmers and Landless
Labourers.
• Uncertainty shrouding credit
requirements.
• Seasonality of many agricultural
activities
• High information and transaction
SOURCES OF AGRI-FINANCE
1.NON-INSITUTIONAL
SOURCES.
• Money Lenders.
• Traders.
• Commission agents.
• Landlords.

7.INSITUTIONAL SOURCES.
 INSITUTIONAL SOURCES
• CO-OPERATIVE CREDIT
SOCIETIES.

• COMMERCIAL BANKS.

• REGIONAL RURAL BANKS.

• NATIONAL BANK FOR

SHARE OF SOURCES
Total Credit to Agriculture
In Crore

05-06 06-07
 CO-OPERATIVE CREDIT
SOCIETY

SCARDBs: State Co-operative Agriculture and Rural Development

Banks.
PCARDBs: Primary Co-operative Agriculture and Rural
Development Banks.
Evaluation of co-operatives
• Heavy dependence on outside funds
• Problem of high level of Overdues
• High level of NPAs
• Substantial losses
• PACS are too small in size to
economical & viable.
• Greater benefits to Larger landowner
• Regional disparities in distribution of
credit
 “Co-operation has
failed but
Co-operation must
succeed”
• In 2005-06 Co-operatives
provided Rs. 39,404 crore of
rural credit
 REFORMS
• Revival and restructure of CCS.
• Financial restructuring &
assistance.
• To make co-operatives truly
democratic & member driven.
• Regulatory control of the RBI
• NABARD-as implementing & Pass
through agency.
 COMMERCIAL BANKS
• Less Concentration on Primary
Sector.
• Nationalization of banks.

During 2005-06 Commercial banks

provided rural credit of Rs. 1,25,859
crore.
69.7 % of total 1,80,486 crore
institutional credit.
 REVIEW
• Rapid Expansion and
Diversification.
• Large no. of small advances.
• Reduction of margin available.
• Bad recovery position.
• Multi-alternative credit system.
• Decline in credit deposit ratio.
• Reduction of loan to small
 REGIONAL RURAL BANKS
• Local feel + Business organization.
• Low cost low profile credit
institution.
• Staff from the neighboring area.

• 2006-07, RRBs provided 27,964

crore as credit to Agriculture
sector.
• 8.5% of total institutional credit to
 PROBLEMS OF RRBs

• Organizational Problem.
• Problems of recovery
• Mounting losses leading to
Non-Viability.

• Management Problems.
REFORMS
Relative Share
Per cent

2004-052005-06
• Apex bank for rural credit.
• Provides credit to SCBs & RRBs.
• Assistance to state government.
• Inspecting Co-operatives, RRBs.
• Maintains a R&D funds.
• Rural Infrastructure
Development Fund (RIDF)
• Microfinance Innovation.

• Kisan Credit card scheme.

• Credit monitoring arrangement.

• Refinance under SGSY.

• Co-operative development fund

(CDF)
• Supervision
“Take up one idea. Make that
one idea your life - think of it,
dream of it, live on that idea. Let
the brain, muscles, nerves, every
part of your body, be full of that
idea, and just leave every other
idea alone. This is the way to
success, that is the way great