Question

why has rural banking not been able to give adequate credit to farmers?​

Answer 1

Answer:

Rural banking has not been able to give adequate credit to farmers. This is mainly due to lack of proper infrastructure and instruments to dispense credit to needy farmers. It has also failed to develop a culture of deposit mobilisation, lending to worthwhile borrowers and effective loan recovery.

Answer 2

Rural Banking in Providing Adequate Credit to Farmers :

• Rural banking has faced challenges in providing sufficient credit to farmers, primarily due to the lack of proper infrastructure and instruments to dispense credit to those in need.
• Moreover, rural banks have encountered difficulties in fostering a culture of deposit mobilization, lending to deserving borrowers, and ensuring effective loan recovery.
• These factors have contributed to a high default rate on agriculture loans and a high incidence of overdue installments by farmers. Limited access to banking services and poor communication networks, has made it difficult for rural banks to reach farmers in remote areas.
• Additionally, rural banks have not been successful in developing a culture of deposit mobilization, which is essential to maintain a stable flow of funds for lending to farmers.

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