Indian Journal of Economics and Development

Credit plays an important role in the development of agriculture. A sample of 150 farmers was taken with 23, 28, 46, 43 and 10 farmers selected from marginal, small, semi-medium, medium and large farm size categories respectively. The share of borrowed funds in the total investment was 43.19 percent. In borrowed funds, share of institutional and non-institutional credit was 65.98 and 34.02 percent respectively. Share of non-institutional credit was significant so it was suggested that government may regularized working of non-institutional credit agencies to keep check on their working. Problems faced by the farmers in availing institutional credit were non-cooperative attitude of staff of revenue department, offering security and rigid repayment plan and in case of noninstitutional credit were high rate of interest, offering security and inadequate amount. Reasons for opting non-institutional sources of credit were no paperwork, secrecy, and easy access.