Role of primary agricultural cooperative societies in rural financing

Co-operative credit institutions in India provide credit to agriculture as well as non-agricultural sectors. Short, medium & long term credits are being provided by cooperative credit institutions. Co-operative institutions are playing a vital role in the socio-economic development of the country, particularly in the rural areas and in agriculture and allied sectors. Primary agricultural cooperative credit societies (PACS) are the main source of institutional finance for small and marginal farmers in India. PACS are the banks which are situated in rural area and play a very important role in rural credit system by performing their activities on co-operative principles. The PACS play a major role in financial inclusion of farmers and agricultural development in India. They protect farmers from certain social evils like agricultural backwardness, poverty and rural indebtedness. Through their variety of services, they are reaching the vulnerable sections of the society. They provide short term and medium term loan to rural people to meet their financial requirements. The objective of this paper is to analyze the role of Primary agricultural cooperative credit societies in rural financing and rural development.