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Impact of Socio-economic Variables on Disbursement of Agricultural Credit

Agriculture is also an enterprise like others and success in it also depends on socio-economic development of the locality. Higher development of area in terms of infrastructure as availability of markets, electricity, roads, literacy also increase the profitability in agriculture and thus necessitates the credit requirement in agriculture. The study is based on time series data of Bihar for a period of 25 years that is from 1980–81 to 2005–06. It is found that association between agricultural credit flow and different socio-economic and infrastructure variables when it was analysed for different categories of districts classified on the basis of per hectare agricultural loan. The proportion of electrified villages, road length per 1000 kms of geographical area, literacy per cent, number of dairy co-operatives per 1000 villages, population per bank branch and per capita electricity consumption were comparatively high in districts of category D than the category of districts A, indicating the association of these socio economic and infrastructural variables with agricultural credit flow in different districts of Bihar.