Rural Credit Delivery System in Maharashtra: Some Emerging Issues

Shah, Deepak (2007): Rural Credit Delivery System in Maharashtra: Some Emerging Issues. Published in: Artha Vijnana , Vol. Volume, No. March - June, Nos. 1&2 (10 June 2005): pp. 127-148.

Abstract

An investigation into rural credit delivery system in Maharashtra shows slower growth in institutional finances through commercial banks, credit cooperatives, RRBs and LDBs, particularly during the decade of 1991-2000, which is mainly due to adverse environment created by the financial sector reforms. Due to unfavourable policy framework, the entire rural credit delivery system is reduced to a moribund state. High transaction costs and poor repayment performance are the twin root causes of the moribund state of rural credit delivery system. With a view to revive the agricultural credit delivery system, there is need to adopt innovative approaches like linking of Self-Help Groups (SHGs) and Non-Government Organizations (NGOs) with mainstream financial institutions. The revival of rural credit delivery system of Maharashtra also depends on strategies that are required for tackling issues such as sustainability and viability, operational efficiency, recovery performance, small farmer coverage and balanced sectoral development of the state.

• Item Type: MPRA Paper
• Institution: Gokhale Institute of Politics and Economics
• Language: English
• Keywords: Rural Credit Delivery
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

References

Capoor, Jagdish (1998), Valedictory Address at the National Seminar on ‘Organisational evelopment Approach to Revamping of Regional Rural Banks’, Proceedings of the National Seminar, Banking Institute of Rural Development, Lucknow.

Gulati, Ashok and Seema Bathla (2002), ‘Institutional Credit to Indian Agriculture: Defaults and Policy Options’, Occasional Paper-23, NABARD, Mumbai. Kumar, Sant and R.S. Dixit (1988), ‘Long-term Credit Requirements of Rural India: Role of PLDBs’ , in ‘India’s Rural Cooperatives’, Gurasharan Singh Kainth (Ed.), Regency Publications, New Delhi, pp. 185-192. Mujumdar, N.A. (2001), ‘The New Architecture of the Rural Credit System’, Professor M.L. Dantwala Monograph Series Monograph No. 1, Department of Economics, University of Mumbai, Mumbai, August. Puhazhendhi, V. and B.Jayaraman (1999), ‘Rural Credit Delivery: Performance and Challenges Before Banks’, EPW, January 16, pp. 175-182.

Shah, Deepak (2001), ‘How Far Credit Co-operatives are Viable in New Economic Environment : An Evidence from Maharashtra’, Prajnan, Vol. 30, No. 2, July- September, pp. 149-174.

Shivamaggi, H.B. (1996), ‘Future Strategy for Development of Co-operatives’, Economic and Political Weekly, Vol. XXXI, No. 20, pp. 1187-1188.

Shivamaggi, H.B. (2000), ‘Reforms in Rural Banking: Need for Bolder pproach’, Economic and Political Weekly, Vol. XXXV, No. 20, pp. 1714-1718.