Abstract

                                The study has investigated the sources of credit, its utilization, repayment and impact through an in depth micro level analysis among 125 households randomly selected from the service area of SBT, Venganoor, Kerala. The distribution of respondents on various ranges of loan amount reveals that one fourth of the respondents have a loan of more than 4 lakhs. It is observed that there is not even a single respondent without any loan and the number of loans have gone up to 5.The average number of loans at the overall level is 2.42. Agency wise, the major group is commercial banks, which constitute 45.87 per cent and service area bank has occupied the third position next to other public sector banks and co-operatives. On analysing the demand for credit for various purposes, it is found that agriculture forms the major need followed by housing and business undertakings on number of loans, but it is in the reverse order considering the amount of loans. Regarding misutilization of credit, the extent of misutilization is only 8.85 per cent. But, the maximum of 56.64 per cent misutilization is recorded for loans from co-operatives and that for agricultural loans, it is 69.60 per cent. Among institutions, maximum over dues is seen for loans from co-operatives. One glaring finding is that the extent of wilful defaulters are to the extent of 62.07 per cent, the maximum of the upper strata respondents without any valid reason for non repayment of loan in time. While analysing the impact of credit on the standard of living, it can be seen that more than one-third of the respondents are able to improve their living status and is more favourable for the upper strata. The improvement may be due to better housing facilities, purchase of assets or increased income from business or agriculture. However, the living status of 16.8 per cent has deteriorated, while availing credit facilities due to the inability to repay in time due to unforeseen constraints.

Key words : Credit utilization, Repayment behavior, Rural households, Kerala