Socio-economic impact of revolving cash credit to farmers

Rural cooperative credit structure is an important and integral part of Indian banking system. It has played a decisive role in economic development of India especially of rural economy. Technical support by Punjab Agriculture University and financial support by cooperative banks are known to be ‘two pillars’ of green revolution in India which took place in seventies of last century. A well-defined rural credit system has already been developed to meet agriculture production oriented credit needs. However for other socio consumption needs farmers are still dependent upon informal credit sources. To fill this credit gap cooperative banks of Punjab have taken a lead in1997-98 and have started providing Revolving Cash Credit Facility (RCCF) to farmers. This study makes an attempt to assess the impact of this new product line on socio economic conditions of farmers. In this article profile of borrowers has been studied to know various aspects of borrowers. Detailed analysis of social and economic impact of RCCF on life of borrowers has also been conducted in selected district central cooperative banks (DCCBs) of Punjab (India). Some measures have been suggested to strengthen it further.