Borrowings and Utilization of Agriculture Credit vis-a-vis Urbanization: A Case of Rural-Urban Interface in North of Bengaluru

The study was undertaken in North of Bengaluru to assess the quantum of credit borrowed, sources of credit and its utilization pattern by farm households across rural urban interface. The required primary data was collected from randomly selected 50 farmers each under rural, peri-urban and urban transacts. The results revealed that the farmers availed more credit from formal sources compared to informal sources across all transacts. Commercial banks occupied the prominent position in all the three transacts with a share of 52.25, 53.15 and 42.17 per cent in rural, peri-urban and urban areas, respectively followed by cooperatives among the formal sources. In case of informal sources, the amount borrowed was high in rural area (40.06 %) followed by peri-urban (24.13 %) and urban area (15.89 %). Furthermore, the amount borrowed among informal sources was more from the money lenders and commission agents. When crop loans are concerned, the peri urban farmers are more productive in proper utilization of the loans followed by urban and rural farmers. Credit borrowed in rural areas was primarily utilized on livestock (32 %), education (32 %) and bore well digging (22 %). Whereas, majority of farmers in peri-urban area and urban areas utilized credit for high value horticulture crops and livestock rearing. In case of high value crops, for digging of bore well and livestock rearing, the utilization percentage was cent per cent or even more in all the areas. It was because these crops will help in getting assured returns which is sufficient enough to meet their household expenditure when compared with the normal crop enterprises