| Abstract |
An indepth study of forces determining the sources and use of rural institutional credit seems to be lacking. This study is an attempt to fill in this gap. More precisely, attempts will be made through statistical analysis to explain the following sequence of choices by the borrower in terms of village attributes, household attributes, and certain attributes of the credit package itself:
• Which factors determine whether a borrower household demanding loans will indeed get a loan? And if yes, how much?
• If a borrower household gets a loan, how should one explain whether he will get loan from only formal sources, only informal sources, or both?
• Are there distinctive characteristics of households, which borrow exclusively from the formal or informal sector, as compared to those who borrow from both sources?
• If households are borrowing from formal sources, which formal sources (cooperatives, commercial banks, or registered SHGs) are they tapping? Is there any market segmentation within formal credit sources in terms of household and loan characteristics?
• We propose to run separate regressions to explain loan availed from each major source together with important loan characteristics. This exercise has the potential to demonstrate how, to what extent, and why the credit package looks different from one segment to another.
• How should one explain the borrower’s actual loan portfolio across purpose (broadly, consumption loan, production loan, or both) in terms of borrower village, household, and loan characteristics? Is there any correspondence between loan sources and purpose of loan? Does credit allocation across purposes varies simultaneously with choice of loan source? |