CREDIT DIVIDE: LORING CHANGES IN INSTITUTIONAL AND NON-INSTITUTIONAL LENDING AMONG MAHARASHTRA FARMERS

This study examines the evolving dynamics of credit accessibility among farmers in Maharashtra, focusing on the shift between institutional and non-institutional lending sources from 2002-03 to 2018-19.Using data from the National Sample Survey Office (NSSO) 59th and 77th Rounds, we analyze the relationship between farmers' income growth, loan accessibility, and outstanding loan amounts across various landholding sizes.Our findings reveal that while income levels across all landholding categories have increased, large and medium farmers have benefited more significantly from institutional loans, facilitated by lower interest rates and higher loan amounts.Conversely, marginal and small farmers continue to rely more on non-institutional credit, which often carries higher interest rates and less favorable terms.The study also highlights a growing reliance on institutional loans, with notable improvements in access to formal credit, particularly for medium and large farmers.However, non-institutional loans remain an essential component of the credit landscape for smaller farmers, underscoring persistent financial challenges.This analysis supports the need for policy interventions that promote inclusive access to affordable institutional credit, especially for marginal and small farmers, to reduce income disparities and mitigate the risk of indebtedness in the agricultural sector.