Priority Sector Lending by commercial Banks in the state of Andhra Pradesh: Barrower Lending Behaviour

This study has found three mains results. It has found that Credit Standards Credit Standards Regard to Farmers negatively affected lending to farmers. The research has also found that Assessment of Return on Credit to Farmers negatively affected lending policy to farmers. Further, Assessment of Risk on Credit to Farmers negatively affected lending to farmers. This indicates that Credit Standards with Regard to Farmers; Assessment of Return on Credit to Farmers; and Assessment of Risk on Credit to Farmers reduces the amounts provided to the farmers in AP.

Policies should be put in place to help banks relax their credit qualification for farmers. Just like any other financial institution, banks want to ensure that their funds are safe as they lend to farmers. However, much as the farmers require funding, the risk control measures and their desire for profitability is stifling the lending.

This recommendation is based on the finding that tighter controls concerning credit standards to farmers, assessment of return on credit to farmers, and assessment of risk on credit to farmers tended to limit lending.