The paper is based on a study of Nagaland State Cooperative Bank Ltd (NSCB) loan utilization behaviour of farmers under Kohima, Dimapur and Mokokchung Districts of Nagaland State. 120 farmers obtaining loan during the period 1998–1999 were selected for the present study. It was found that 35.00 percent of the respondents had fully utilized the loan for the purpose for which the loan was obtained. 9.17 per cent of the borrowers were found to have invested the full amount into some other productive purpose, which means that 44.17 per cent of the respondents had made wise decision by investing the loan in productive purpose. Near about half (49.17%) of borrowers, which constitute the majority of the respondents invested the loan partially on both specific purpose as well as on unproductive purposes. Remaining 6.66 per cent of the respondents had fully mis utilized by investing the loan in unproductive purpose. Correlation coefficient of borrowers’ utilization behaviour showed positive significance with age, socio-economic status and annual income whereas, adoption behaviour, earner's percentage, perceived adequacy and easy availability of loan were found to be positive but non-significantly correlated. However, timely availability of loan reflected negative correlation with utilization behaviour.
Loan utilization, Borrowers, Productive purpose, unproductive
