Determinants of Access to Institutional Credit for Agriculture Sector: Empirical Evidence from Odisha, India

Agriculture is vital in the Indian economy as it contributes significantly to output and employment. This study analyses the trend and progress of institutional credit for agriculture in Odisha and examines the determinants of accessing institutional credit for agriculture by the farmers. The article was based on primary and secondary sources of data. The primary data were collected from 393 farm households in Odisha. Descriptive statistics and a probit regression model were employed to analyse the data. The results indicate that a significant proportion of agricultural farmers still rely upon informal sources of credit. In explaining the determinants, education of farmers, agricultural land holding, cooperative membership and bank visits have a positive and significant impact on the probability of accessing Institutional agricultural credit, and the only factor that has a negative and significant impact on accessing institutional agricultural credit at 1% level is income from off-farm activities. The result suggests that the government should promote the establishment of self-help groups (SHGs) in rural areas to distribute agricultural financing, ensuring efficient access to credit and minimising procedural complexity to improve rural development and effective credit utilisation. JEL Codes: Q1, Q14, G5, G51