Agricultural Credit in India: Trends and Composition

Credit is an essential input mediating agricultural production. Entry to institutional finance allows the farmer to maximize production by investing in equipment and buying contingent inputs such as fertilizers, quality crops, and compost, and supplying funds before the farmer collects reimbursement from commodity purchases, often deferred and phased. In the early 1990s, the pace of developing agricultural credit dropped visibly and stayed moderate for the rest of the decade, too. Until around 2002-03, we did not see accelerated improvement. Indirect finance has grown even more impressively as more and more divisions are being integrated into the agricultural credit sphere.