Estimation of Transaction Cost and Cost of Credit of Women Dairy Self Help Groups in Karnataka

The present study was conducted to estimate the transaction cost and cost of credit for the Women Dairy Self Help Groups (SHGs) in the Belagavi district of Karnataka. The state is the pioneer in both co-operatives and SHGs establishment. It ranks first in cumulative numbers of SHGs with 10.31 lakh covering 1.21crore members, but it ranks second in cumulative saving amount with 1311 crore. For the study, secondary data were collected from 30 WDSHGs in the Belagavi district. Data were analyzed using Tabular analysis. The results revealed that overall total transaction cost incurred by the sample WDSHGs was 1128.87 and percent of the cost of credit to average loan amount was 12.88. Thus, it can be concluded that the members of WDSHGs availed credit at low transaction cost and most of them were undertaken dairy farming activities for income and employment generation in the study area. Therefore, policy initiatives should be taken with an aim to increase the number of WDSHGs in villages and the financial facilities to the poor households in rural India be made available at competitive terms.