Rural Credit in India

There has been a wide range change in the rural credit structure, in the post independence era. Even then the exploitation of rural masses in credit market is still the most pervasive and persistent features of rural life in India. There has been an expansion of rural credit market after 1969 (the post bank nationalization period) but in the financial liberalization era (after 1991) the formal system of institutional credit in rural India had been severely damaged. The social and development banking policy had been reversed and a market oriented banking system, with a motive of profitability has been adopted. The rural credit system is in back-foot and the rural poor is being deprived to the exposure of the growing banking system in India. Present book analyses the theoretical aspects of rural credit and in process, it examines the demand for and supply of rural credit empirically. The empirical analysis is based upon both secondary as well as primary data collected at village level. The study shows that there has been a gap between the demand and supply of credit and there is a problem of cronic indebtness among the rural poor. So, it is essential to have a drastic change in the rural credit policy of India, for the growth and development of rural economy.