Rural Credit: An Introduction

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Rural credit is made up of the following: one, credit disbursed by commercial banks, regional rural banks and the cooperative banks and credit societies constituting the formal sector; two, micro credit involving the bank-SHG linkage and the Micro Finance Institutions (MFIs); three credit being extended by the banks through government employment generation programmes like Swarnajayanti Gram Swarozgar Yojana, which involves an element of government subsidy and four, informal credit involving the rural money lenders, friends and relatives. After the nationalization of banks in 19869, priority sector lending was introduced accounting for 40% of the net bank credit, which was meant predominantly for small scale industries and agriculture, with the latter accounting for 18% of the total net bank credit.

The thrust which agriculture and the rural credit sector had received after bank nationalization was gradually withdrawn in the post-reforms period after 1991-92. The problem of money lenders who lent at usurious rates of interest, which had been somewhat tackled in the years of social banking, again surfaced. The financial sector and banking sector reforms have meant that the social objectives of providing credit to the rural sector, in particular the income poor and in expanding the role of the formal sector to contain the informal sector, no longer hold. The share of rural credit in total declined from 17.55% in 1993-94 to 14.09% in 2002-03. The book should prove useful to scholars, students of management, economists, bank officials and NGOs.

ABOUT THE AUTHOR Sridhar Krishna

Sridhar Krishna holds a Ph.D. in Economics from the Centre for Economic Studies and Planning, Jawaharlal Nehru University. He is currently Consulting Editor, Icfai Business School Research Centre, Bangalore. Before joining Icfai, he has served as a Consultant for the Institute for Social and Economic Change and for the Institute for Studies in Industrial Development. Besides these, he worked as an Associate Consultant at the Indian Council for Research on International Economic Relations; as a Fellow at the Institute for Human Development; as an Associate Editor for Indian Journal for Labour Economics; as a Lecturer at the Indian Institute of Finance; and as a Research Officer at the Centre for Budget and Policy Studies. He has to his credit several articles published in the Economic and Political Weekly.

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Bibliographic information

Title
Rural Credit: An Introduction
Author
Edition
1st. ed.
Publisher
ISBN
9788131427354
Length
x+192p.
Subjects