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Abstract
The institutional credit has been conceived to play a pivotal role in the agricultural development of India.
A large number of institutional agencies are involved in the disbursement of credit to agriculture. However,
the persistence of money lenders in the rural credit market is still a major concern. In this backdrop, the
present study has examined the performance of agricultural credit flow and has identified the determinants
of increased use of institutional credit at the farm household level in India. The study based on the
secondary data compiled from several sources, has revealed that the institutional credit to agriculture in
real terms has increased tremendously during the past four decades. The structure of credit outlets has
witnessed a significant change and commercial banks have emerged as the major source of institutional
credit in recent years. But, the declining share of investment credit in the total credit may constrain the
sustainable agricultural growth. The quantum of institutional credit availed by the farming households is
affected by a number of socio-demographic factors which include education, farm size, family size, caste,
gender, occupation of household, etc. The study has suggested simplification of the procedure for a better
access to agricultural credit of smallholders and less-educated/illiterate farmers.