Institutional Agricultural Credit and Utilisation Behaviour: Evidence from Farm Households in Karnataka: 26153
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https://doi.org/10.35716/IJED-26153
Author: Nikhil Govind Malali, V. Karthick, D. Suresh Kumar, Balaji Kannan, and R. Vasanthi
Author Address: Tamil Nadu Agricultural University, Coimbatore-641003 (Tamil Nadu)
Abstract
Institutional
agricultural credit enhances farm productivity; however, its impact depends on how
effectively borrowed funds are utilised. The study examined the sources,
extent, utilisation behaviour, and determinants of credit use among 120 farmers
(254 loan accounts) selected through multistage random sampling in Bagalkot
district, Karnataka, during 2024–25, using descriptive statistics, the Gini
coefficient, one-way ANOVA, Garrett ranking, and a binary logit model. Commercial
banks dominated credit supply (60.86 per cent), followed by PACS (33.97 per
cent), with large farmers receiving 42.52 per cent. Although 78.85 per cent of the
credit was used productively, only 25 per cent of farmers utilised it as
intended, with significant variation by farm size. Non-farm income and credit
amount significantly improved the proper utilisation. Promoting non-farm
incomes, strengthening guidance on extension-linked credit, and aligning loan
sizes with genuine credit requirements would improve utilisation.
Keywords
Agricultural
finance, farm investment, income diversification, rural households.
JEL
Codes
G21,
Q12, Q14.