Mr. Vivek M. Tathod, Mr. G.B. Choudhary, Mr. Sadanand Shinde

ABSTRACT

The rural credit system entrapped by the twin problems of high transaction cost and poor repayment performance reduces the profitability of rural branches of nationalised banks. The incompetence of management of individual banks also increased the non -viability of the rural credit delivery system. The creditworthiness criteria adopted by institutional credit are alienating small farmers from borrowing as lending is closely linked to the landholding status of the borrower. The formal credit institutions neglected consumption needs of the poor and emphasised only on production credit. The spread of the system has been uneven across regions and wealth groups. The proportion of the poor obtaining credit from the banking system has been lower than their share in the total population. In this paper we try to find the various problems and issues faced by Indian agriculture sector.