Role of Banking Institutions in Providing Agricultural Credit to Farmers in Sikar District, Rajasthan

Abstract

Agricultural credit is an essential component of rural development because timely and adequate finance enables farmers to purchase agricultural inputs, adopt modern technology, invest in irrigation and machinery, undertake allied activities, and manage production risks. Banking institutions play a particularly important role in reducing farmers' dependence on informal sources of finance. The present study examines the role of banking institutions in providing agricultural credit to farmers in Sikar District, Rajasthan, with particular emphasis on accessibility, adequacy, utilization, awareness, bank-selection factors, repayment behaviour, and farmers' satisfaction with institutional credit services. The study adopts a descriptive and analytical research design and proposes the use of both primary and secondary data. Primary data may be collected from 300 farmers who have availed agricultural credit from selected public-sector banks, private-sector banks, regional rural banks, and cooperative banking institutions operating in Sikar District. A structured questionnaire/interview schedule is used to examine farmers' socio-economic characteristics, landholding patterns, awareness of agricultural credit schemes, purposes of borrowing, loan adequacy, documentation requirements, processing time, interest-related perceptions, repayment behaviour, and satisfaction with banking services. Secondary information is drawn from reports and publications of the Reserve Bank of India (RBI), National Bank for Agriculture and Rural Development (NABARD), government agencies, and related institutional sources. The paper argues that banking institutions have a multidimensional role in agricultural development that extends beyond crop financing to investment credit, allied activities, agricultural infrastructure, financial inclusion, and risk management. Nevertheless, farmers may encounter problems such as inadequate awareness, complicated documentation, procedural delays, distance from banking facilities, insufficient sanctioned amounts, and difficulties associated with repayment. The study recommends simplification of lending procedures, stronger financial literacy initiatives, greater use of digital banking, improved credit assessment, timely loan disbursement, and farmer-oriented banking services. Strengthening institutional agricultural finance can contribute significantly to agricultural productivity, financial inclusion, and sustainable rural development in Sikar District.