Role of institutional credit in agricultural growth of Kerala

Abstract

Agricultural credit is an essential part of economic development of India. In 2021-22, the agriculture share in total GDP was 16.8 per cent. In Gross Capital Formation of Indian economy, 9.2 per cent is contributed by the gross capital formation of agriculture and allied sector in 2020-21. It was 8.5 percent in 2011 which means that agricultural contribution towards Indian economy has been increasing. Lack of finance is the one of the main problem faced by the farmers for doing agricultural activities. The current paper tries to evaluate the effect of institutional credit movement in agriculture and also to analyze the performance of institutional credit schemes agency wise and district wise in Kerala. The data collected from reports of SLBC were used to examine the effect of institutional credit movement in agricultural sector. The study mainly evaluated the three institutional agencies’ role, namely public sector commercial banks, regional rural banks and cooperative banks, on institution credit flow. The outcome of the research reveals that more volume of agricultural credit is disbursed by Commercial banks. The agricultural credit share in the whole credit issued by regional rural banks is very high compared to the other two financial agencies. Keywords: Farmers; Commercial banks; Institutional Credit; Gross Domestic Products; Agricultural Growth; Cooperative Banks; Regional Rural Banks.