Role and Trend of Agricultural Finance Institutions in the Inclusive Growth of Farmers in Rural India

Purpose: The study is to evaluate the development of agricultural credit in India, exploration of the agricultural development and also to examine the various policies implemented by the Government of India. The paper emphasizes on the development in agriculture finances, new methods, techniques and technologies with a focus on how they lead to improved agricultural growth and greater financial inclusion. Design/Methodology/Approach: The study is grounded on secondary data compiled from different journals, web sites and related information from newspapers, annual reports of NABARD and RBI. Findings: The study has discovered that, informal credit has decreased as a percentage of total debt, while institutional credit to agriculture has exaggerated over time as a result of institutional agencies volunteering into rural areas, nationalization of foremost commercial banks and the establishment of regional rural banks through Reserve Bank of India initiatives. Originality/Value: This study is unusual in that it attempts to trace the agricultural financial institution in India, as well as the numerous agricultural policies that have been enacted as a result of agricultural finance. Paper Type: Case Study

State of Agricultural Finance in India

Agricultural finance has come a long way in the past 15 years. After the concerted efforts of GOI, supported by RBI and NABARD, towards doubling of agricultural credit flow in 2004¬¬¬¬--2005, the growth in credit flow to the sector has been robust with an impressive CAGR of 18% between 2004--2005 and 2019--2020. While outreach increased, the Terms of Trade (Farmers and Non-farmers) has largely been on a declining trend, reflecting the underlying stressed conditions in farming. There is a challenge of inclusion, where small and marginal farmers continue to struggle for suitable and affordable credit products and access. This book summarizes the current state of agricultural finance in India, highlighting policy blind spots and grey areas. It documents the important advancements made in the agri-finance space in the last few years. The book covers various aspects of Agri-Finance Policy; institutional appetite and architecture for agriculture credit; formal financial services for enterprises in agriculture; agri-business, including FPOs; and innovations in credit, insurance, delivery mechanisms for agri-sector.

Farmers' perception and preference of Islamic Banking in Turkey

PurposeThe purpose of this paper is to examine the factors that influence farmers' preference for the use of Islamic banks in Turkey and to investigate their knowledge level and perception about Islamic finance.Design/methodology/approachSurvey data used in this study is obtained by drawing a sample of 1902 farmers who are members of the Agricultural Credit Cooperatives Union (ACCU) from 37 provinces of Turkey. Pearson's Chi-square test is used to analyze the association between the demographic features of farmers, conventional bank usage and Islamic bank usage. Binary logistic regression model is used to estimate the factors influencing the preference for Islamic banks. Explanatory variables include knowledge on Islamic banking and finance, perception of compliance to religion, saving ability and cost concern along with the control variables of Islamic bank branch number in the region and age of respondent. Robustness check is conducted via alternative models using ordinary least squares (OLS) and logistic regression.FindingsLess than 10% of the participant farmers use Islamic banks and 59% declare they know nothing about Islamic banking. Age, education level, income level, nonagricultural income level, saving ability, duration of working in agriculture, land size and region are significantly related to farmers' preference of using Islamic banks. Knowledge level, perception of religious compliance, saving ability and cost concern are statistically significant factors that influence the probability of using Islamic banks.Research limitations/implicationsThis study does not include the analysis of the relationship between being religious and using Islamic banks because questions related to the assessment of religious practice were excluded due to the ACCU's sensitivity to investigate personal beliefs. Therefore, future studies can expand the scope of this research by investigating religiousness. The sample is chosen from the ACCU members who are already benefiting from a formal source of credit; therefore, the results should not be attributed to all farmers.Practical implicationsIslamic banks and microfinance institutions' further engagement in the agricultural sector and ACCU's implementation of Islamic finance instruments.Social implicationsIslamic banks' further diversification in the agricultural sector and ACCU's implementation of Islamic finance instruments.Originality/valueTo the best of the authors' knowledge, this paper is the first to investigate the farmers' perception and preference of Islamic banking in Turkey. The sample size of 1902 is much larger and geographically diversified compared to studies in agricultural finance. This study will be valuable for the agricultural finance empirical studies in Turkey as well as an important addition to the emerging literature on Islamic finance.

An Overview of Agriculture Finance in India

Purpose: As a result of limited financial resources, agriculture has been plagued by a lack of profitability. Diverse policy initiatives have been made to improve access to finance, including: Affordability has always been an issue for policymakers in India, and it will continue to be. As the title suggests, the aim of this study is to explore the requirements and policy interventions in the domains of farm financing. Design/Methodology/Approach: Attempts are made in this article to examine the government’s agricultural policy measures in this country. Information for the article was culled from the Reserve Bank of India and numerous annual documents. Findings: It was found in the study that most of today’s treatments have been tried or recommended in the past, but was not successful for various reasons. However, if such measures had been undertaken at that time, India would have ranked among the top countries in terms of access to finance. Originality/Value: This study is unusual in that it attempts to trace the history of agricultural finance in India, as well as the numerous agricultural policies that have been enacted as a result of agricultural finance. Paper Type: Research Case Study

Can technology readiness predict farmers’ adoption intention of the e-AgriFinance app?

PurposeThis research aims to examine the effect of the two dimensions of technology readiness – motivator and inhibitor on behavioural intention to adopt a mobile agricultural finance app called e-AgriFinance app among the farmers in Sarawak, Malaysia.Design/methodology/approachData were collected from 337 farmers who cultivated the 4 major crops in Sarawak – oil palm, rubber, cocoa and pepper using a face-to-face questionnaire survey. Collected data were analysed using partial least squares structural equation modelling with R plspm package.FindingsThe research found that both motivator and inhibitor dimensions of technology readiness predicted the farmers’ behavioural intention to adopt the e-AgriFinance app, with the former had a relatively stronger positive effect and the latter had a relatively weaker negative effect.Research limitations/implicationsThis research was conducted in the context of rural farmers in an emerging economy. As such, modern farmers in developed countries may have different adoption behaviour of mobile agricultural finance app. The data were collected from farmers of the four major crops – oil palm, rubber, cocoa and pepper, and thus it may not be representative of the whole population of farmers in Sarawak.Originality/valueThis research served as one of the few studies that focused on the relationship between technology readiness and mobile app adoption among farmers from the perspective of an emerging economy.

The Effects of Agricultural Financing on Agricultural Productivity in Nigeria

The study “The Effects of Agricultural Finance on Agricultural Productivity in Nigeria” investigated the effect of agricultural financing, both public and private on the outputs of two main sectors of agriculture: crop production and livestock production. The objectives of the study are to examine the long and short run relationship of agricultural financing on crop production and livestock production, and to examine the causal relationship between agricultural finance and agricultural productivity. To achieve these objectives, the study employed two models, each using ARDL Test, Bounds Test, and Granger causality test using time series data from 1981 to 2019.Data were obtained from CBN and World Bank data bases. Dependent variables were Crop Production and Livestock Production respectively and independent variables were Public Finance, Commercial Bank Credit to Agriculture, Inflation Rate and Interest Rate. The model was tested using descriptive statistics to analyse the significance of the relationship between the dependent and independent variables. The results show that both public and private finance were positive but insignificant in the short run. In the long run, public finance remained insignificant whereas private finance was positive and significant. Thus, private financing is more effective at improving agricultural productivity than public finance. The study also revealed a negative long run relationship between interest rate and the outputs of crop and livestock production during the period. It is therefore recommended that the government encourages private investment in agricultural activity, and puts measures in place to curb corruption and embezzlement. Government should also ensure that credit facilities are provided to farmers at low interest rate to reduce it detrimental influences.