Question

what is the problem with rular loan and credit ? pls explain according to 5 marks que describe completely ​

Answer 1

Answer:

There are other problems such as charging of high interest rates, non-transparency in imposing additional charges for institutional lenders, proliferation of MFIs in over-banked areas (whereas they would be welcome in grossly unbanked areas).

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Answer 2

Answer:

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Rural Credit in India: Problems, Measures and Farm Loan Waiver Scheme

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Problems of Rural Credit in India:

1. Insufficiency:

In spite of expansion of rural credit structure, the volume of rural credit in the country is still insufficient as compared to its growing requirement arising out of increase in prices of agricultural inputs.

2. Inadequate Amount of Sanction:

The amount of loan sanctioned to the farmers by the agencies is also very much inadequate for meeting their different aspects of agricultural operations. Considering the amount of loan sanctioned as inadequate and insignificant, the farmers often divert such loan for unproductive purposes and thereby dilute the very purpose of such loan.

3. Lesser Attention of Poor Farmers:

Rural credit agencies and its schemes have failed to meet the needs of the small and marginal farmers. Thus, lesser attention has been given on the credit needs of the needy farmers whereas the comparatively well-to-do farmers are getting more attention from the credit agencies for their better credit worthiness.

4. Growing Over-dues:

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The problem of over-dues in agricultural credit continues to be an area of concern. The recovery of agricultural advances to various institutions is also not at all satisfactory. In 1997-98, the recovery of agricultural advances of commercial banks, co-operative banks and regional rural banks were 63 per cent, 66 per cent and 57 per cent respectively. Such growing over-dues has also been resulted from poor repaying capacity of farmers. As a result of that, the credit agencies are becoming wary of granting loan to farmers.

5. Inadequate Institutional Coverage:

In India, the institutional credit arrangement continues to be inadequate as compared to its growing needs. The development of co-operative credit institutions like Primary agricultural credit societies, land development banks, commercial banks and regional rural banks, have failed to cover the entire rural farmers of the country.

6. Red Tapism:

Institutional agricultural-credit is subjected to red-tapism. Credit institutions are still adopting cumbersome rules and formalities for advancing loan to farmers which ultimately force the farmers to depend more on costly non-institutional sources of credit.