International journal of Agronomy and Plant Production. Vol., 3 (2), 54-58, 2012 Available online at http:// www.ijappjournal.com ISSN 2051-1914 ©2012 VictorQuest Publications
A study on utilization pattern of Kisan credit card (KCC) among the farmers in Raipur district of Chhattisgarh 1
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Pramod Parwate , M.L.Sharma & Mahesh Maske
1- Department of Agril.Extension, Indira Gandhi Krishi-Vishwavidyalaya, Raipur (C.G) 2- Deaprtment of Agril. Economics, Indira Gandhi Krishi-Vishwavidyalaya, Raipur (C.G) *Corresponding Author Email:
[email protected] Abstract Kisan Credit Card (KCC) emerged as an innovative credit delivery mechanism to meet out production credit requirements of the farmers in a timely and adequate manner. Realizing its potential for simplifications of loan procedures and in reducing the drudgery of cumbersome documentations to issue the Kisan Credit Cards to farmers on the basis of their holding for uniform adoption by the banks so that the farmers may use them to readily purchase agricultural inputs such as seeds, fertilizers, pesticides, etc., and draw cash for their production needs. The present investigation was carried out during the year 2009, in two purposively selected block of Raipur district of Chhattisgarh state with 120 KCC holders. The results reveled that the, majority of them utilized the KCC benefits for crop insurance (95.66%), obtained loan up to maximum allotted limit (93.66%), utilized whole amount of loan for the purpose for which it was drawn/obtained (85.33%), utilized the loan facilities under KCC for all the cropping season (40.00%). However, the overall utilization of KCC was recorded up to 69.60 per cent among the respondents. Keywords: Kisan Credit Card, Farmers, Utilization. Introduction Kisan Credit Card is a simple card-cum-passbook. The beneficiaries under the scheme are issued a credit card and a pass book or a credit card cum passbook incorporating the name, address, particulars of land holding, borrowing limit, validity period, etc. which serves both as an identity card as well as facilitate recording of the transactions on an ongoing basis. Farmers may approach the nearest branch of any Bank or Primary Agricultural Co-operative Societies (PACS) for it. The Government of India, Reserve Bank of India and NABARD have, been focusing on the need to streamline the credit delivery mechanism and to simplify the existing systems, procedures, documentation relating to sanction and disbursement of credit to the farmers at large. The R. V. Gupta Committee and the Crop Loan Committee set up by RBI and NABARD respectively had brought out the constraints in the flow of agricultural and rural credit besides the various aspects of crop loan system of lending and had come out with useful recommendations for improving the existing systems and procedures for effective credit delivery. As a sequel to this, NABARD, in consultation with RBI and select Banks, formulated a model scheme for issue of Kisan Credit Card by banks across the country, which was circulated in August 1998. The Kisan Credit Card is to be issued to the existing crop loan borrowers who have no over dues in their borrowed accounts and to new borrowers who have not yet borrowed. Loan for any activity coming under the purview of production credit of agriculture, working capital requirement of allied activities and non-farm sectors may be considered under the scheme. The farmers/borrower have to give application for the issue of KCC. The necessary documents that have to be produced by the applicant are the copies of land record, no dues certificate from other financial institutions, latest land tax paid receipt, original or certified copies of title deed and latest agricultural income tax paid receipt. The cumulative (up st to 31 March 2008) number of KC Cards issued by all agencies stood at 71.55 million at all India level.
Intl. J. Agron. Plant. Prod. Vol., 3 (2), 54-58, 2012
Out of this, Co-operative Bank issued 34.81 million cards (49%), Regional Rural Banks issued 10.13 million cards (14%) and Commercial banks issued 26.61 million cards (37%) (Anonymous, 2007-08). Methodology The study was carried out in Raipur district of Chhattisgarh state, because maximum numbers of Kisan Credit Cards have been issued in this district. There are 16 blocks in Raipur district, out of which two blocks i.e. Arang and Palari were selected purposively for this study. In each selected block, Arang Cooperative branch from Arang block and Kodwa Cooperative branch from Palari block were selected purposively. Thereafter, Dewri branch from Arang and Vatgan branch from Kodwa were selected. Out of total 23 Villages of both the selected Village Cooperative branches, 50 per cent Villages were selected purposively on the basis of maximum availability of KCC holders in the Villages. In this way a total of 12 Villages were selected for this study. Out of total Kisan Credit Card holders of the Village, 10 KCC holders were selected randomly from each selected Villages. In this way a total of 120 KCC holders were considered as respondents for collection of data in this study. The data were collected through personal interview with the help of a structured interview schedule and analyzed with appropriate statistical methods. Operationalization of Dependent variable and its measurement To assess the extent of utilization of Kisan Credit Card (KCC) by the farmers, seven statements were framed out, on various aspects of KCC utilization. The response of farmers were recorded in four point continuum scale i.e. ‘Full utilized’, ‘Partial utilized’, ‘Least utilized’ and ‘Not utilized’ with the score of ‘3’, ‘2’, ‘1’ and ‘0’ respectively. The extent of utilization of Kisan Credit Card by the each respondent was calculated by using the following formula. O EUKCC = X 100 S Where, EUKCC O S
= = =
Extent of utilization of Kisan Credit Card Total score obtained by the farmers Total obtainable score Results and Discussion
Extent of utilization of Kisan Credit Card by the farmers It is evident from the data presented in Table 1 that 99.17 per cent of the respondents were sharing high utilization of the KCC benefits for crop insurance, followed by 81.67 per cent of the respondents obtained loan up to maximum allotted limit, 65.00 per cent respondents utilized whole amount of loan for the purpose it was drawn/ obtained. It is also revealed that 33.34 per cent of the respondents showed medium level of utilization of the whole amount of loan for the purpose it was drawn / obtained, followed by 23.34 per cent of the respondents utilized the loan facilities under KCC for all the cropping season. About 17.50 per cent of the respondents obtained loan up to maximum allotted limit and 0.83 per cent of the respondents utilized the KCC benefits for crop insurance. The cent per cent respondents showed low level of utilization of KCC for identification purposes, followed by 76.67 per cent of the respondents utilized the loan facilities under KCC for all the cropping season, 1.66 per cent of the respondents utilized whole amount of loan for the purpose it was drawn / obtained and 0.83 per cent of the respondents obtained loan up to maximum allotted limit. Extent of utilization and utilization gap among different categories of farmers about various aspects of KCC The extent of utilization and utilization gap among the different categories of farmers about KCC has been reported in Table 2. In case of marginal and small farmers, maximum percentage of utilization (95.59%) was noted in obtained loan up to maximum allotted limit, whereas, minimum percentage of utilization (33.33%) was observed in full use of KCC for identification purpose. The overall percentage of utilization on various aspects about Kisan Credit Card was noted to be 67.04 per cent. The highest percentage of utilization gap (66.67%) was observed in use of KCC for identification purpose, followed by utilized the loan facilities under KCC for all the cropping season (62.90%). The overall utilization gap for different aspects about KCC was observed to be 32.96 per cent.
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Intl. J. Agron. Plant. Prod. Vol., 3 (2), 54-58, 2012
Table 1. Distribution of respondents according to their utilization of Kisan Credit Card (n=120) KCC Component
Obtained loan up to maximum allotted limit Utilized the loan facilities under KCC for all the cropping season Utilized whole amount of loan in the purpose for which it was drawn/ obtained Full use of KCC for identification purposes as an identity card Utilized the KCC benefits for crop insurance*
Low (Up to 33%) F % 01 0.83 92 76.66
Level of utilization Medium (36 to 66%) F % 21 17.50 28 23.34
High (67 to 100) F % 98 81.67 00 0.00
02
01.66
40
33.34
78
65.00
120
100.00
00
0.00
00
0.00
00
0.00
01
0.83
119
99.17
* Crop insurance facility is an inbuilt essential component of KCC. Therefore, each KCC holder is bound to utilize this facility The result revealed that in case of medium and large farmers, percentage of utilization (> 96%) was noted for crop insurance facility in KCC, whereas, minimum percentage of utilization (33.33%) was observed for full use of KCC for identification purposes as an identity card. The overall percentage of utilization on various aspects about Kisan Credit Card was noted to be 71.25 per cent for medium farmers and for large farmers, it was noted to be 72.12 per cent. In case of medium and large farmers, the highest percentage of utilization gap (66.67% and 66.67%) was noted for full use of KCC for identification purposes as an identity card, followed by utilized the loan facilities under KCC for all the cropping season (57.78% and 57.58%). The overall utilization gap on different aspects about KCC was observed to be 28.75 per cent for medium farmers and for large farmers it was noted to be 27.88 per cent. To assess whether there was any significant difference between the different categories of the farmers, the ‘Z’ test was applied and result show that there was a significant difference between utilization level of KCC among marginal & small farmers and medium farmers at 5% level of probability. While, in between medium and large farmers, it was found to be non-significant, whereas in between marginal & small with large farmers, there was significant difference. It shows that the Kisan Credit Card was more utilized by medium and large categories of farmers as compared to marginal & small farmers (Table 2). Extent of overall utilization of Kisan Credit Card by the respondents On the overall basis (Table 3) maximum percentage of utilization (95.66%) was noted in utilized the KCC benefits for crop insurance facility, followed by obtained loan up to maximum allotted limit (93.66%), whereas, minimum percentage of utilization (33.33%) was observed for full use of KCC for identification purposes, followed by utilized the loan facilities under KCC for all the cropping season (40.00%). The overall percentage of utilization of various aspects about Kisan Credit Card was noted to be 69.60 per cent. The highest percentage of utilization gap (66.67%) was noted for full use of KCC for identification purposes as an identity card, followed by utilized the loan facilities under KCC for all the cropping season (60.00%). The overall utilization gap for different aspects about KCC was observed to be 30.40 per cent. Correlation analysis of independent variables with extent of utilization of Kisan Credit Card by the farmers The correlation analysis was applied to determine the relationship between independent variables and extent of utilization of KCC by the farmers. The result reveals that out of 16 independent variables, only four variables i.e. education, social participation, economic motivation and level of satisfaction were found significantly and positively correlated with the level of utilization of KCC. ; Remaining 12 variables like age, caste, family size, occupation, annual income, land holding, credit acquisition, extent of demand and availability of credit, repayment of loan, risk orientation, sources of information and contact with credit agencies not indicated any significant relationship with level of utilization of KCC.These findings clearly indicate that higher education, social participation, economic motivation and level about satisfaction about KCC are directly related variables for increasing the utilization of Kisan Credit Card by the farmers (Table 4.23). Almost similar finding were reported by Kumar et al. (2007-08) about holding of KCC by the households.
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Intl. J. Agron. Plant. Prod. Vol., 3 (2), 54-58, 2012
Table 2. Extent of utilization and utilization gap among different categories of farmers about various aspects of Kisan Credit Card KCC utilization
MOS
Obtained loan up to maximum allotted limit Utilized the loan facilities under KCC for all the cropping season Utilized whole amount of loan in the purpose for which it was drawn/ obtained Full use of KCC for identification purposes as an identity card Utilized the KCC benefits for crop insurance* Overall
159
Calculated ‘Z’ value
Marginal & Small (n=53) OS EU (%) 152 95.59
UG (%) 4.41
MOS 135
Medium (n=45) OS EU (%) 124 91.85
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Large (n=22) OS EU (%) 61 92.42
UG (%) 7.58
UG (%) 8.15
MOS
159
59
37.10
62.90
135
57
42.22
57.78
66
28
42.42
57.58
159
119
74.84
25.16
135
125
92.59
7.41
66
63
95.45
4.55
159
53
33.33
66.67
135
45
33.33
66.67
66
22
33.33
66.67
159
150
94.34
5.66
135
130
96.29
3.71
66
64
96.96
3.04
795
533
67.04 4.50*
675
481
71.25
28.75
330
238
72.12
27.88
32.96 0.650 3.80*
MOS- Maximum Obtainable Score, OS- Obtained Score, EU- Extent of Utilization, UG- Utilization Gap Note- * Crop insurance facility is an inbuilt essential component of KCC. Therefore, each KCC holder is bound to utilize this facility. Table 3: Extent of overall utilization of Kisan Credit Card by the respondents KCC utilization MO OMS EU EG MS (%) (%) X
Rank
X Obtained loan up to maximum allotted limit 3 2.81 93.66 6.34 II Utilized the loan facilities under KCC for all 3 1.2 40.00 60.00 IV the cropping season Utilized whole amount of loan in the purpose 3 2.56 85.33 14.67 III for which it was drawn/ obtained Full use of KCC for identification purposes as 3 01 33.33 66.67 V an identity card Utilized the KCC benefits for crop insurance * 3 2.87 95.66 4.34 I Overall 15 10.44 69.60 30.40 MOMS- Maximum Obtainable Mean Score, OMS- Obtained Mean Score, EU- Extent of Utilization, EU- Utilization Gap Note-* Crop insurance facility is a inbuilt essential component of KCC. Therefore, each KCC holder is bound to utilize this facility.
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Intl. J. Agron. Plant. Prod. Vol., 3 (2), 54-58, 2012
Table 4: Correlation analysis of independent variables with extent of utilization of Kisan Credit Card by the farmers Independent variables Coefficient of correlation “r” value Age 0.104 Education 0.181* Caste 0.143 Family size 0.009 Social participation 0.220** Occupation 0.010 Annual income 0.087 Land holding 0.005 Credit acquisition 0.007 Extent of demand and availability of credit -0.134 Repayment of loan -0.050 Economic motivation 0.226** Risk orientation -0.003 Level of satisfaction about KCC 0.193* Source of information 0.049 Contact with credit agencies 0.120 ** Significant at 0.01 level of probability, * Significant at 0.05 level of probability Conclusion The overall percentage of utilization on various aspects about KCC was recorded to be 69.60 per cent among the respondents. For increasing the utilization of KCC among the farmers, focus should be given on educated farmers for increasing the social participation, economic motivation and level of satisfaction about Kisan Credit Card. On the basis of entire finding and observation it can be concluded that Kisan Credit Card, are not only meeting out the credit demand of the farmers but also found as a beacon of light for the overall upliftment of the farming community. Hence in the light of findings it is recommended that efforts should be made to popularize the KCC among various categories of the farmers for judicious use of low interest credit in agriculture for increasing the productivity for sustainable development. References Anonymous, 2007-08. NABARD Annual Report. Pp.26-27. Dhopie, R.S., Shinde, P.S. and Alagusundaram, A.A. 1996. Short- term credit utilization behavior of farmers from co-operative and Gramin Bank with reference to Akola district of Maharashtra. Indian Cooperative Review 34(1): 81-89. Doshinge, B. 2005. Study of implementation of Kisan Credit Card scheme by the Institutional banks in Nagpur district. M.Sc. (Ag.) Thesis, Dr. P.D.K.V. Akola (MH). Kallur, M.S. 2005. Impact of Kisan Credit Card on Flow of Credit and Repayment Rate in a Backward Region: A Case of Agricultural Development Bank of Shorapur Taluka, Gulbarga District, Karnataka State. Ind. J. of Agri. Econ. 60 (3), July-Sept. 2005. Khatkar, R.K., Singh, V.K., Luhacs, V.P. and Kharinta, S.K. 2005. Role of Kisan Credit Cards and self-help groups in rural financing in Haryana. Ind. J. of Agri. Econ. 60 (3), July-Sept. 2005. Vedini, K.H. and Durga, P. 2007. Evaluation of Kisan Credit Card scheme in the state of Andhra Pradesh. Ind. J. of Agri. Econ. 62(3), July-Sept. 2007.
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