Co-operative credit institutions in Punjab appear to be losing favour among farmers.
Even as co-operative credit institutions have lost significant share in farm debt and short-term loans, commercial banks have gained significant share and the traditional credit providers, which are money lenders and commission agents, continue to be the biggest players in the farm debt and credit market.
According to a study done by the Institute for Development and Communication (IDC), even as the total farm debt in Punjab at current prices has increased five-fold over the preceding ten years, from Rs 5,700 crore in 1997 to Rs 30,394 crore in 2008, share of co-operative credit institutions in farm debt as well as in short- term credit has declined significantly
The co-operative credit institutions numbered around 4000, have lost around 15 per cent share in last 10 years (from 1997-2008) in the short term loans ,as per study done by Institute for Development and Communication (IDC).
Co-operative credit institutions share in short term loan in last 10 years have declined from 33.98 per cent in 1997 to 18.96 per cent in 2008. Even in the farm debt, share of
Co-operative credit institutions have declined by 8.23 per cent from 27.14per cent 1997 to 18.91 per cent in 2008.
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H S Shergill, who conducted a study on the growth of farm debt in Punjab from 1997 to 2008, has revealed the share of commission agents and money lenders in farm debt has declined marginally by 2.96 percentage points, from 46.32 per cent in 1997 to 43.36 per cent in 2008. In short term loans, the commission and moneylenders have lost 7.14 per cent from 61.31 per cent in 1997 to 54.17 per cent in 2008.
Even as the traditional credit providers has registered marginal decline in share, the share of commercial banks has risen substantially in last 10 years.
The commercial banks have increased their share in farm debt substantially by 12.36 %, increasing from 19.42 % in 1997 to 31.78% in 2008. Also in the short term loans , commercial banks have increase their share by 21.59 per cent from 4.71per cent in 1997 to 26.30 per cent in 2008.