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Accessibility of Institutional Credit among the Agricultural Labour Households and its Impact on their Livelihood

Kundu, Amit and DAS, SANGITA (2021): Accessibility of Institutional Credit among the Agricultural Labour Households and its Impact on their Livelihood. Published in: Prajnan , Vol. XLX, No. Vol. XLX, No. 4, 2021-22 (5 April 2022): pp. 419-443.

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Abstract

Despite the major structural changes in the Indian credit system, landless and near landless agricultural labour households are still facing difficulties while accessing formal credit services. The paper tries to examine the possible factors influencing the accessibility of institutional credit by agricultural labour households and its role in their livelihood. Based on a village-level field investigation in the district of East Medinipur, West Bengal, the study shows that the Possession of operational land, membership of SHG, diversified farm and non-farm income, and higher financial literacy index are the significant determinants to increase the possibility of receiving institutional credit for these households. Using the two-stage least square method, the paper further reveals that the monthly per capita income of the agricultural labour households can increase if they use institutional and non-institutional sources of loans in income-generating activities. The study also suggests that the lower the age of the household head and the less dependency on the informal credits for consumption purposes of the households, the higher the possibility of improving the livelihood of the agricultural labour households.

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