Agricultural credit and rural economy an analysis on the impact of agricultural credit on rural development

The agriculture sector is crucial for every economy to achieve inclusive growth and poverty reduction. It plays the important role in the development of each nation. As the major source of livelihood for majority of the population, its growth is inevitable for the development of the nation. Agricultural production in India is mostly driven by credit support and can help farmers to grow more providing this financial support. Agricultural credit support as financial input has been increased compared to past years (Huppi et. al). The contribution and the impact of banking is limited in agriculture sector especially in rural area due to low return. The paper is an attempt to know the credit distribution among the different players of agricultural sector and to determine the impact of the credit on rural population. The study also considers the farmers accessibility into the institutional credit. Always there are factors which restrict the entry in to agricultural credit by the rural farmers, especially the small and marginal scale farmers. This study is an attempt to understand the intensity of different factors that determine farmer's accessibility into the rural credit. It also considers the impact of farm loan on the rural development, by way of change in income and employment opportunities.