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7. Most people use their account for depositing and withdrawing money. Some use it for accumulating
fund and interest earnings.
Issues related to Credit pattern:
1. Most of the people borrow from their relatives and friends (70%). Most of people have taken KCC
crop loans for meeting their other personal needs.
2. The cost of maintaining an account and procedural problems in accessing formal credit act as
disincentives for consumers with weaker financial background.
3. Most of the banks need collateral for their loans. It is very difficult for a low income individual to find
collateral for a bank loan. They think taking loans from bank will affect their social reputation.
4. The weavers who are mostly Muslims said earning interest money is against the Islamic laws.
5. The farmers are taking KCC loans put due to their poor repayment their interest rate increases which
is also a major issue as it becomes a burden on them.
Issues related to other financial services:
1. Only 30% of the respondents have got access to insurance schemes. Most of them have life insurance.
Only 25% of the respondents have access to govt. schemes like PMJDY, APY, PMSBY. Hardly anyone
knows about Fasal Bima Yojana.
2. The rural people generally access their remittances through a bank account.
3. People are less aware about golden schemes like PMJDY, APY, PMSBY, and Fasal Bima Yojana.
4. The low income group is unaware of the collective action and advantages of institutions such as
cooperatives, SHGs and JLGs. The financially excluded segments and regions are characterized by a
very low level of social organization. Due to prevailing levels of distress and uncertainty, people are
often reluctant to collaborate or contribute to any common cause.
5. They are less involved in financial literacy programs.
B. SUPPLY SIDE:
BANK
1. The Credit to Deposit ratio is unfavorable in most of the banks.
2. The bank at times face problems when opening the account of a new customer due to identity
mismatch. The customer then has to approve the identity proof from the village Pradhan.
3. The banks hesitate to finance tenant farmers as they do not have documentary proof of their right to
till the land for raising crops or for investment purposes.
4. The recovery position is very poor in the rural bank branches. The poor customer fails to repay loan
in most of the time. As a result the interest rate also increases. The bank face problem in regulation
of the loan amount. The rising NPA due to non-repayment of loans by farmers also prevents bank
from financing.
5. As most of the rural masses have a low earning they have a poor saving habit. Even though they
have saving accounts they fail to save regularly as a result the zero minimum balance accounts are
maintained at zero only.
