Institutional Rural Credit in Assam – An Overview

Abstract

Rural credit plays an important role in improving agricultural production and productivity and thus mitigating the distress of the farmers. Initially farmers were depended on village money lenders, relatives, friends and to some extend by taccavi loans from government. But with the growing modernization of agriculture, the requirement of agricultural finance has considerably increased. The Rural Planning and Credit Department are formulating and regulating the policies and procedure to make the credit facilities available to the vulnerable sections of rural people in the country. More specifically, since 1969 commercial banks have been in providing credit to the farmers, which has led to increase in rural bank branches. In a state like Assam where the average operational holding is 1.1 hectare and more than 85 percent of the farmers' family are included in small and marginal farmers, the bulk and agricultural credit is channelized through the Gaon Panchayat level Co-operative Societies. Agriculture, as a priority sector in Assam credits are provided by the Assam Co-operation Apex Bank, Nationalized Banks including the State Bank of India, Regional Rural Banks etc. It is an attempt in this paper to analyse the recent trend of institutional rural credit in Assam with the help of secondary sources of data.