Informal Borrowing Cost of Banks Loan in Agriculture Sector in India: A Case Study of Haryana
Dr Jasbir Singh
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Abstract
The agriculture and rural development are highly inter-related. Agriculture has been considered as crucial
sector to generate major proportion of employment. Productive job opportunities are to be created in rural
areas through development of agriculture, irrigation facilities, rural infrastructure and promotion of village
and cottage industries for rural development by providing cheaper bank loan.
Most of the low-income households are not in a position to borrow at a higher rate of interest, the risk involved
and the cost of servicing such a large number of small loans in remote and far-flung villages would necessitate
the credit agencies to keep themselves at an arms length. In an adverse situation like this, the lending agencies
are generally reluctant to finance the poorer groups. Main motive of this study is to find out the main informal
causes those are responsible to increase the institutional loan. In that situation bank loans should used for
improving production with the help of latest technology and inputs. Present study is totally based on primary
data. Considered this way, apart from production and the investment loans help to increase production and
incomes. Even schemes for infrastructure development where charges are levied have become bankable
propositions.
Keywords: Opportunity Cost; Proper Utilization; Big Farmers; Medium Farmer; Marginal Farmers; Allied Activity; Rural Industry; Small Business; Transport
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