what are the different sources of loans for agriculture farmers in 2010
Answers
Answer:
Bank
Explanation:
Explanation:
Agricultural credit in India is available to farmers and other people working in the farming sector in India from various sources. Short and medium term agricultural credit requirements of farmers and others employed in the agricultural sector in India are usually met by the government, money lenders, and co-operative credit societies. Farmers with long-term loan requirements, such as a long-term agri loan or a loan for agri land purchase, can avail of loans from land development banks, the Indian government, and money lenders.
The National Bank for Agricultural and Rural Development (NABARD) provides long-term and short-term credit to service the needs of Indian farmers at highly competitive interest rates.
The sources of agricultural finance in India can be classified into two main categories, i.e., institutional and non-institutional sources.
Non-institutional sources, constitute around 40 percent of total credit availed by farmers in India. The interest rate of the non-institutional agri loans is usually very high, although the land or other assets are kept as collateral in the secured loans. include entities like relatives, landlords, traders, commission agents, and money lenders. On the other hand, institutional sources include entities such as co-operatives, NABARD, and commercial banks like the RBI and SBI Group.
In the following section, the various institutional sources of agriculture business loan or agriculture loan are discussed briefly.
Institutional sources
The key goal of institutional credit is to enable farmers to increase their agricultural productivity and, as a consequence, their income. Institutional credit doesn’t employ exploitative practices. Some of the main institutional sources of agricultural finance in India are listed below.
a. Co-operative credit societies
Co-operative credit societies are the best and cheapest sources of agriculture business loan in India. The active Primary Agricultural Credit Societies (PACS) in India account for almost 86% of all Indian villages and makeup over 36% of the total rural populace in the country
b. Government
The government is another valuable provider of agricultural finance in India. Agricultural finance available from the Government of India are called taccavi loans and these are usually disbursed during times of emergency, such as when floods or famine occur. Interest rates on these loans are also very low.
c. Regional rural banks
Regional rural banks or RRBs have been providing direct loans to agricultural labourers, small and marginal farmers, as well as rural artisans, among others since 1975 for productive purposes.
d. Commercial Banks
Commercial banks have played a marginal role in providing rural finance. After the nationalization of commercial banks in 1969, these banks began to provide both direct and indirect agri loans for short and medium term durations.
e. Land development banks
These provide both medium and long-term agri business loans against a collateral of land that acts as a security. The duration of these agri business loan is usually 5–20 years with a high loan quantum.
To reduce the exploitation of farmers and enable their growth the government has made many initiatives, encouraging banks and NBFCs to offer the rural farmers agri business loans at competitive interest rates. However, an increase in the awareness and education about the benefits of institutional financing are important for effective acceptance of the institutional credit in rural areas.