Comparative Credit Gap Analysis in an Innovative Credit Delivery System (Kisan Credit Card Scheme) among Institutional Sources in Karnataka

This study was conducted in 2012–13 on credit delivery through Kisan Credit Card (KCC) scheme, which was introduced in the year 1998–99, to assess the growth in numbers of KCCs issued, amount of credit sanctioned and the demand and supply of credit under KCC scheme in Karnataka. The study has revealed that the commercial banks issued the highest number of KCCs, followed by the co-operative banks and minimum were issued by Regional Rural Banks (RRBs) in Karnataka. But, in the case of Hyderabad Karnataka region, the situation was just the reverse. In reality, the average amount of loan sanctioned per acre was found to be less than the cost of cultivation (credit requirement) by both the financial institutions. The sanctioned amount was still lower by the co-operative banks, when compared to commercial banks in all the four major crops. The total credit gap was found higher for the cotton and banana crops, irrespective of categories of farmers and the financial institutions. The study has also concluded that in both small and large farmers, the cost of cultivation as a whole influenced significantly the credit requirement as compared to consumption credit.