Rural Development Credit is very important in the underdeveloped and developing countries. It is an integral part of the rural development program. The governments of many countries have adopted this system to protect the farmers from getting exploited. In this paper we will discuss this issue in detail.
Agricultural credit is an important component of the rural development program. The government of any country focuses more on rural development to minimize poverty.
Those countries who rely highly on the agricultural activities are now developing an efficient credit system to advance the economic and as well as social development of the farmers.
Importance of Rural Development Credit
Rural development credit is needed timely because it helps to increase the working as well as fixed capital for the peasants. In many countries the institutional agencies are helping the farmers to get credit.
In the era of globalization and overall economic liberalization rural development credit is an important need to use the human, material and natural resources fully.
It is needed, especially for the underdeveloped and developing countries, to use the human resources in the rural areas efficiently and effectively.
Supply of Credit
The government must improve the financial and economic condition of the farmers for the development of the rural areas. Therefore an efficient and easy process of credit supply is badly needed to provide enough credit facility to the farmers.
Generally, the farmers don’t have enough money to invest in agricultural production. In many countries, the poor farmers borrow money from the rich who exploit them in the form of high rates of interest. Therefore, the government should take the initiative to stop this.
So, in many countries, Rural and Regional Banks have been established to provide money to the farmers as a credit but with low interests. They have also simplified the terms and conditions of applying the credit.
Last Updated on : 30th July 2013