|Regional Rural Banks (RRBs) Lending Policies and Loans in India (IRMA, 1993)|
In the foregone section, an attempt was made to analyse the performance of the TGB by examining mainly the quantum of credit received by households belonging to different socio-economic strata at a point of time. Besides the quantum, what is also important is the regularity in borrowing or the sustained access of households to an institutional credit agency. The main objective of the rural credit policy of India has been to create a dependable source of institutional credit and to ensure a regular flow of credit to rural households. The regular dealings of rural households with an institutional credit agency not only indicate its dependability but also the sustainability of the institutional borrowing for them. This aspect of institutional borrowing however, has not received much attention in the rural credit literature.15 Here an attempt is made to examine the regularity in borrowings of the sample households.
Column 6 in Tables 3 to 7 gives the proportion of households coming under different socio-economic groups having regular access to the RRB. A vast majority of the 197 sample households (about 63 percent), have a regular access to the bank. These are the households who have been borrowing regularly from the bank for their production or consumption needs and whose line of credit or access to the bank is not broken. The rest of the households (73) were not able to borrow regularly. In most of the cases, either default of a loan or inability to provide additional collateral had prevented them from borrowing regularly from the RRB.
When seen across different groups under each of the five socio-economic categories, caste/religion (social), occupation, land, asset and income, the proportion of households having regular access to the TGB shows an increase along with the increase in the groups status. Among the social groups (Table 3), while the proportion of regularly borrowing households is about 77 percent in the case of forward castes, the same is about one-fourth for the SC & ST Group. As for occupation groups (Table 4), it is mainly the households belonging to trade and business (84 percent) and cultivator (69 percent) groups who have a regular access to credit as compared to those in the lower status groups like agricultural labour and rural artisan/service. Across land-size groups (Table 5) also the proportion of households borrowing regularly increases with the increase in the land-holding. While for the landless the proportion is 31 percent, for the highest land-size group it is about 93 percent. When seen across asset groups (Table 6), the pattern is still more clearly depicted. The proportion of households having regular accessibility increases from about 8 percent in the case of the lowest asset group to 100 percent in the case of the highest asset group. Thus all households in the top-most asset group are able to make regular use of the RRBs loan facility. Lastly, across income groups also (Table 7), one can see that the proportion of households borrowing regularly shows an increase along with the increase in the groups income. When compared to households in the below Rs. 6,400 groups, majority of those in the income groups above that level have a regular accessibility.
The above analysis thus shows a clear association between the socio-economic status and regularity in access. Though the majority of the sample households have got regular access to the RRB, they are mostly from the better-off sections. Like the quantum of credit even regular accessibility to the RRB is found to be unequally distributed across households.
The households who have lost regular accessibility to the bank were found to be mainly defaulters, both intentional and non-intentional. As a result of their default they were not in a position to borrow further or renew their access. Interestingly, a majority of these households (44 of the 73), have borrowed under various poverty alleviation schemes. Many of them, as mentioned elsewhere, have come under the institutional network for the first time, and for some of them the dealings with the bank have ended with their first loan itself. In the case of those who could sustain accessibility to the bank, their regular repayment of loan was found to be mainly responsible for it. However, default of loan in certain cases had not necessarily broken the access. Those who could offer additional or new security were able to borrow new loan despite their default. Thus, security based lending has also helped the richer households to maintain their access to bank credit even under default conditions.