Dimensions of Investment Credit to Farmers in North Karnataka An Economic Analysis

Abstract

An empirical study on the dimensions of investment credit in North Karnataka was newlineconducted in the Department of Agribusiness Management, University of Agricultural newlineSciences, Dharwad during 2018-19. The objectives of the study were accomplished using newlineprimary and secondary data, and employing the analytical techniques such as growth rate newlineanalysis, instability analysis, markov chain analysis, dummy variable analysis and Garrett s newlineranking technique. newlineThe findings of the study revealed that the total agricultural advances including crop newlineloan and investment loan has increased from 1,80,104 crores during 2005-06 to 11,62,617 newlinecrores during 2017-18 with a growth rate of 17.03 per cent per annum at all India level. The newlineshare of crop loan in the total advances was much higher than that of the investment loan at newlineall India level during the period 2005-06 to 2017-18. The study also revealed that the average newlineannual share of commercial banks in total investment credit advanced in North Karnataka was newline65.80 per cent followed by cooperative banks and RRBs were 10.84 per cent and 23.36 per newlinecent, respectively during the period 2005-06-2017-18, which means that commercial banks newlinehad much bigger share in disbursement of investment credit in North Karnataka. The results newlineof transitional probability matrix analysis for investment credit in North Karnataka during newline2005-06 to 2017-18 revealed that the investment activities of farm mechanization, sheep, goat newlineand piggery, dairy development and minor irrigation had the highest probability of retaining newlinetheir investment shares (0.50, 0.33, 0.29 and 0.10, respectively). The results of Garrett s newlineranking concluded that stringent security norms and lengthy procedure for availing newlineinstitutional finance from banks were the most common problems faced by farmers in all the newlinethree regions in North Karnataka. Bank officials faced the problem of lack of information newlineamong farmers about loan schemes and legal documentation in the study area.