Wilful and non-wilful default in Agricultural Credit

Abstract

Present study is an attempt to analyze the default in repayment of loans and to take suitable measures to
minimize over dues. The study is based on the 90 borrower farmers comprising of 25, 25, 25, 15for marginal,
small, medium and large farmers respectively which were collected from five villages of Manihari block of
Ghazipur district of eastern Uttar Pradesh. The study revealed that the 64 percent borrower farmers were
found to be defaulters and 36 percent borrower farmers were non-defaulters. The ratio between wilful and
non-wilful defaulters of total defaulter were found in equal numbers in the sample. The study further
analyzed the non-wilful defaulter and find out the number of chronic defaulters on the basis that these type of
defaulters have no any income even they are not in position to meet out their family consumption
expenditure. Such type of defaulters were indentified. 34.48 percent of the total non-wilful defaulter and
accounted 48.59 percent over dues of the total ovedues. Farmers wise defaulters were further analyzed and
their numbers were found 12, 18, 17 and 11 on marginal, small, medium and large farmers respectively. The
percentage of ovedues of the total over dues were reported 46.94, 24.93, 16.82 and 11.31 percent on different
categories of farmers. The amount of outstanding loan per defaulters was higher on wilful defaulter and
over dues were higher on non-wilfuldefaulters in the sample farmers. The government and bank official
should take utmost care at the time of disbursing the loan and ensure that it must be sanction based on
farmers repaying capacity strictly.