Rural Credit, Needs and Source of Rural Credit
May 02, 2018
Agricultural is a seasonal industry. The output depends upon weather condition. Good timely rainfall products good crops. The crops and the income for the farmer suffer when the weather conditions are not favorable.
Needs of Rural Credit
Development Needs
1. To purchase input like seeds, fertilizers, tools, pesticides and water etc
2. To reclaim the land affected by waterlogging, salinity, floods, soil erosion etc. loan are also take for the leveling of uneven lands
3. To modernize the farming with tractor, harvester, thresher, combine engine and tube well etc.
Non-Development Needs
Loans are taken for their payment of old an ancestral loan, for litigation for ceremonies like marriage, festival etc.
Sources of Rural Credit
Individual, Friends, relatives, villager, shopkeeper, money lender. Landlord, Trader etc. they all provide about ten percent of the total loan. The amount of loan is small, such loan is repaid as harvest.
Zarai Taraqiati Bank
They provide about 55% of the total loan. The bank provides short, medium and long-term loan for development purpose- purchase of inputs, reclamation of land and modernization of farming. It grants a loan in cash. Bank also provides development loans such loan is in kinds
Co-Operative Society
They have a direct link with the farmer. They provide a short and medium-term loan to the farmer. The amount of loan is small. People get the loan against personal security since the borrower is an influential person. He seldom returns the loan.
Commercial Bank
Bank provides a loan to the lender properly. Banks provide round about 25 % of the total loan. Under the supervised credit scheme, the banks provide cheap credit. State bank of Pakistan cover round about 50% less of the entire loan granted to the farmer. State bank also refinances the commercial bank if they run short of funds.
Taccavi Loan
The government provides relief loan to the farmer in emergencies like flood etc. the amount is small. Such loan is not popular due to the red – tape of the offices.
0 comments