Factors influencing overdue bank credit to banana growers in Tirunelveli district of Tamil Nadu
*S. Sasikumar
Department of Economics, St. Xavier’s College Autonomous, Palayamkottai Affiliated to Manonmaniam Sundaranar University, Abishekapatti, Tirunelveli – 627012 India
ABSTRACT
In India, one of the main economic sectors is agriculture. All the resources required for the country’s development are available in India, including year-round market demand, a wide variety of biological resources, and the capacity to produce precipitation when needed. It is vital to comprehend the level of debt incurred by farmers and farming as a vocation in the nation today. The agricultural industry, and farmers in particular, would operate more efficiently if the government provided the advantages and assistance that are required. Institutional finance is a major factor in financing the modernisation of the farm sector. The primary goal of farm communities receiving institutional credit was to support them in using modern inputs wisely in order to increase productivity. In addition to recording farmers’ and financial institutions’ responses to the loan waiver, the current study attempts to determine the factors that determine how long a credit is past due. It is now more important than ever for banks to recover advances due to the alarming increase in past-due sums. Maintaining the fewest number of past-due accounts is the bank management’s major objective. The problem of bank loan non-repayment leads to past-due accumulation, which is a significant worry. When categorising a borrower as good or bad, his resources and ability to repay loans are taken into consideration. For this reason, the current study was conducted in order to provide guidelines that can aid in the classification of potential borrowers as either good or bad borrowers when combined with specific socioeconomic factors. It was observed that many of the beneficiary farmers were not able to get loans from Primary Agricultural Credit Societies, even after their loans were erased, because they did not own land or had a history of deliberate default. Appropriate incentives could be developed for both beneficiaries and non-beneficiaries in order to promote loan payback and lower moral hazard in the farming community. They can raise their output and repay their loans if they are provided with incentives for power, products, off-farm employment, and inputs.