Recovery Performance of Primary Agriculture Credit Societies in India: An Assessment

19 Pages Posted: 12 Jul 2014

See all articles by Rabin Mazumder

Rabin Mazumder

Chandrasekhar Chakravarty

Asia e University (AeU)

Amit K. Bhandari

RBC College; IZA Institute of Labor Economics


Agricultural credit is one of the most crucial inputs in all agricultural development programmes. Access of rural credit has still remained scarce in India. Primary Agriculture Credit Societies (PACS) working at grass-root level, having direct contact with the rural people and meet their financial requirements. The problem of loan overdue is a serious concern in different regions of the country, as it affects the recycling of funds and loses its economic viability as a lending institution. The present study examines the recovery performance of rural credit given by PACS in six different regions of India namely Central, Northern, Southern, Eastern, North-East and Western. The result suggests that the performance of credit recovery has been low in north-eastern states and high in northern and southern states. Recovery performance of credit is directly proportional to non-agricultural loan to agricultural loan, trained-untrained staff ratio and average member per society and inversely related with proportion of government capital to working capital and real growth rates at constant price. To make all PACS viable and ensure adequate and timely flow of credit, appropriate policies are required from the Reserve Bank of India in collaboration with State Governments.

Keywords: cooperative, credit, loan overdue, recovery, policy

JEL Classification: E61, F34, G21, Q13

Suggested Citation

Mazumder, Rabin and Chakravarty, Chandrasekhar and Bhandari, Amit K., Recovery Performance of Primary Agriculture Credit Societies in India: An Assessment. IZA Discussion Paper No. 8294, Available at SSRN:

Chandrasekhar Chakravarty

Asia e University (AeU)

Kampung Attap
Wilayah Persekutuan Kuala Lump, 50000

Amit K. Bhandari

RBC College ( email )

North 24 Parganas
Naihati, 743134

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

No contact information is available for Rabin Mazumder

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