Tag: agriculture sector

Non-institutional sources of rural credit still performs a vital role in providing credit for unproductive purposes.The traditional sources of agricultural credit termed as non-institutional sources.Non-institutional credit providers charge exorbitant interest rates ranging between 24% to 50%.In order to fulfill the financial requirements of the agricultural sector in rural India, appropriate and specialized credit agencies are needed. Credit helped to increase the productive capacity.Agricultural credit can be categorized on the basis of both purpose of credit and objective of credit provider.

The traditional sources of agricultural credit termed as non-institutional sources.Non-institutional credit providers charge exorbitant interest rates ranging between 24% to 50%.In order to fulfill the financial requirements of the agricultural sector in rural India, appropriate and specialized credit agencies are needed. Credit helped to increase the productive capacity.Agricultural credit can be categorized on the basis of both purpose of credit and objective of credit provider.

Co-operative banks have a  3-tier structure.Cooperative banks as a cooperative credit institution provide both medium-term as well as short-term.loans.Cooperatives provide Institutional credit which assists rural households involved in agricultural activities. The government exclusively depended on development of cooperatives as an institutional source of rural credit till 1970.

Land Development Banks- co-operative credit institution provides long-term loans. It provide loans generally more than one year. It provides institutional credit which assist in agricultural developmental activities. Land Development Banks (LDBs) have a 2-tier structure.Land Development Banks (LDBs) have been effectively established in India since 1929.

State Cooperative Banks operate in each state at the apex level.State Cooperative Banks provides institutional credit which assists rural households involved in agricultural activities.Credit helps to increase the productive capacity of the economy.

Cooperatives have not made much progress in tribal and hilly areas- this is a true statement.Cooperative banks as a cooperative credit institution provide both medium-term as well as short-term.loans.Cooperatives provide Institutional credit which assists rural households involved in agricultural activities. The government exclusively depended on development of cooperatives as an institutional source of rural credit till 1970.

Primary Land Development Banks operate at the district level.Land Development Banks (LDBs) are also called as Land Mortgage Banks and Agricultural and Rural Development Banks in some states.Land Development Banks- co-operative credit institution provides long-term loans. It provide loans generally more than one year. It provides institutional credit which assist in agricultural developmental activities.