Credit in Rural India: A Case Study

The paper presents a case study of credit transactions in Palanpur, a north Indian village. Examines a number of issues related to the functioning of rural credit markets, drawing on detailed information from all borrowers and lenders in the village:

• Segmentation of the credit market;
• Achievements and failure of public lending institutions;
• Social inequalities in access to credit;
• Politics of rural credit.

An attempt is also made to relate these findings to those of other studies of credit in rural India.The author concludes that the problematic nature of credit arrangements in Palanpur can be illustrated by the following:

• Inactive land market;
• Retail buying;
• Slow pace of technological change;
• Low educational investments;
• Low incidence of cash rents;
• Absence of landless tenants;
• Limited development of non-agricultural self-employment;
• Emergence of implicit-credit arrangements;
• Economic insecurity.