SYNOPSIS

“A STUDY ON EFFECTIVENESS OF AGRICULTURAL LOANS”

To be submitted to UNIVERSITY OF MYSORE, MYSORE KARNATAKA

In partial fulfillment of requirement for the degree of
Master of Business Administration (MBA)
By
Poojashree K
(18MB0534)
Under the guidance of

INTERNAL GUIDE
Mrs. Prathima Girish
Assistant professor
Department of management

HARANAHALLI RAMASWAMY INSTITUTEOF HIGHER

EDUCATION, HASSAN
2019- 2020
One cannot think of economic development in the country deprived thedevelopment of
agriculture. Agriculture plays a key role in the development ofthe Indian economy. The
Indian economy has experienced structural changesover time with the expected decline in the
share of agriculture in the GDP, fallin its share from 55.1 per cent in 1950-51 to 14.6 per in
2016.
1
 During the post bank nationalisation in India, financial services haveexpanded significantly
in rural areas. This has included the funding of a largenumber of rural credit projects,
increases volume of formal loans, buildingmany new financial institutions and same
mobilization of saving. The loansassistance is valid vehicle for the farmer’s inclusive
development. Financialcredit is the most world-wide and flexible transferable form of
economicresource: with cash obtained via credit one can buy anything that is for sale.
(Gordon Donald, 1976).
2
 The systematic flows of credit through banks havebeen subject to a number of inhibitions
that have worked to eradicate mostsmall farmers. Agricultural Loans provide opportunities
for creativedevelopment, and small farmers have been distant more limited in access tothese
opportunities than other sectors. In ideal form, the situation ofagricultural crop loans for
farmers goes as follows: the government of Indiaand Reserve Bank of India loans money
each to an agricultural bank, which inturn relend the funds directly, or through cooperatives
to farmers. The farmersuse the funds to purchase productive inputs. Which are collective with
family

labour to produce more output. The additional output have sold and theearnings are sufficient
to repay the loan and leave the farmer better off. Thepayments received from the farmers by
the agricultural bank or any otherinstitution are sufficient to regenerate lending capacity, to
coveradministrative costs and to pay the interest on the government loan. Such aprogram
consumes no resource; the money committed simply constitutes arevolving fund. The loans
have repaid and the interest charges are sufficient tocover costs and any defaults.
REVIEW OF LITERATURE

A literature review creates a backbone support in knowing views, ideas, nature, and progress
of effectiveness of agricultural loans. The theme, which has raised here, have related with
effectiveness of loans. After the mid-sixties, a large number of studies have conducted on title
of agricultural finance, credit and loans. In addition, most of the researcher had conducted
research on institutional and non-institutional finance to agricultural sector in India and its
role and impact. Most of the studies concentrated one valuating the impact of agricultural
credit, Loans and finance on the level of poverty, indebtedness, income, consumption
expenditure, etc. of the marginal and small farmers. A brief review of these studies have
given as under:
On the above statement addrising the literature review, report of all india rural credit survey
committee(1954) was setup by the RBI in 1951 to enquire the agricultural credit situstion in
india.
In (1967) patil in his paper on “a case study of repayment of crop loans and causes of their
non repayment” tried to find out the position. After the study of repayment crops vyal el al
(1969) worked on “new agricultural strategy and small farmers” and reporting of the all india
credit survey committee (1969) appointed by the RBI in july 1966 in order to measure the
credit needs and volueme of institutional credit available in aggregrate for agriculture and to
make suitable recommendations. In the year of (1971) the authors are know the requirements
of supply credit needs (a) Subramanian el al “ credit needs and availability to farmers” (b)
George “credit representation of changing agriculture” (c) Rao “agriculture financing of
small farmers. (d) sharma and Prasad “ credit need of the farmers of the different farm size
different stages of technological development in agriculture”. On the basis of commercial
banks and agricultural finance venkat reddy was worked on in the year of (1980) in his study
“about 81% of the crop loans were borrowed to the large and small formers”. After the 80’s
era the author Bhat he studied on “borrowings and utilization pattern of crop production
credit” in Karnataka (1991). In (1993) verashakerappa in his article he stated that the”
priority sector lending”- a case study he was found social groups in Karnataka examined the
causes of over dues. After the credit delivary system in (1994) guptha he study and state that
the” possibilities of agricultural development through co-operative finance”. After the 90’s
review udhai kumar continues the study of “agriculture finance and total credit requirement
of farmers in the year (2001). On the next year (2002) Kaur has studied “agricultural credit
and participation of various credit agencies in Punjab state”

Research
The Statement of the Research Problem

Farmers are the pillar of agricultural economy. A majority of the farmersfind borrowing
necessary as their own farm savings are inadequate to financevarious agricultural
development activities. Crop loans is one of the mostimportant aspects to increase
agricultural output and to improve the standardof living of farmers at all the magnitude. It has
argued that crop loan providesfacility over resources the needed to the farmers (Lipton 1976).
23
 Crop loanhas assumed helpful for changing the cropping patter production, yield,distribution
of production and other social economic changes with sustainableagriculture development for
farmers. The introduction of new agriculturaltechnology in India the mid-1970s, the need for
improving the quality ofinstitutional credit (timely and adequate loan amount) to agriculture
haslargely felt.In this respect, several studies have conducted at different districts inthe state
and India in connection with the supply by the institutional credit andits impact on agriculture
development. However, there were not a single studyon the “Effectiveness of Agricultural
loans” conducted at the district level. Inview of this, there is a need for this kind of research
at gross root level thatwould be very useful for the changing the economic status of the
farmers inthe Solapur District of Maharashtra state

Objectives of the Study

The objectives of the present study are…
I. To examine the growth of agriculture and agriculture finance in Solapur district.
II. .To study the purpose of agriculture crop loan taken by thefarmers in study area.
III. To study the access of agriculture crop loans in the study area.
IV. To study the effectiveness of agriculture crop loans taken by thefarmers study
area.
V. To suggest some solutions on effectiveness of agriculture croploans in the study
area.
VI.