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Effectiveness of Rakub Crop Credit in Selected Areas of Rangpur District

M.R.U. Mian
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

M.A. Kasem
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

Abstract/ Executive Summary:

In examining the effectiveness of RAKUB crop credit present study found that the lending procedure of RAKUB was quite lengthy. Large farmers received more amount of loan within shortest possible period and with least cost compared to medium and smaller ones. Loan obtained for banana production was the highest and maximum of the loan was utilized purposively. Overall loan recovery rate was 66 percent during the study period and large farmers were observed to be better repayers. Major factors affecting timely loan repayment were fear of imposing additional interest and penalties and of avoiding certificate case. RAKUB crop credit became able to bring favorable change in the socioeconomic conditions of the respondents but large farmers were the major beneficiaries. Problems like tips and bribe, delay loan disbursement, etc. were identified in connection of loan receipt which surely hampered productive loan use as well as loan repayment. Repayment of old debt and credit exemption by the government were the major causes of loan defaults.

Keywords: Adequacy, Utilization, Repayment, Effective cost and Impact

Location: Parshuram, Sukurhat and Madhabpur branch of Rangpur sadar, Mithapukur and Badarganj upazila

Start Date: 00-03-2005

End Date: 00-04-2005

Program Area: Socio-economic and Policy

Commodity: Credit

Objectives:

The specific objectives of the study are: i) to examine the adequacy and distribution of RAKUB credit, ii) to study utilization and repayment patterns of RAKUB loan, iii) to determine the effective cost of credit incurred by the borrowers and iv) to identify the socioeconomic impacts of RAKUB crop credit on the borrower.

Methodology:

Three upazilas of Rangpur district were selected purposively for the study in convenience of well communication with RAKUB branch offices. One RAKUB branch was randomly selected from each of the upazilas and thus the selected branches were Parshuram, Sukurhat and Madhabpur branch of Rangpur sadar, Mithapukur and Badarganj upazila .respectively. Total sample size stood at 60 comprising 20 loanees from each of the branches selected randomly from the given list by the branch officials. The loanees were belonged to 13 villages of the selected upazilas.

Survey method was followed to collect necessary information from the respondents. The time period of data collection was March to April, 2005 and data used in this study covered the year 2004. Simple statistical technique, i.e., descriptive statistics like percentage, frequency counts, mean, etc. were applied to attain the objectives of the study.

Source of Information: J. Bangladesh Agril. Univ. 4(1): 165-172, 2006 ISSN 1810-3030

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Time taken to receive loan from .the RAKUB branch seemed to be not reasonable. Large farmers were the major beneficiaries of the RAKUB credit and they were better repay-ers compared to the small and medium farmers. Repayment of old debt and loan exemption by the -government were the important causes of loan default in the study area. Maximum of loaned money was -utilized for productive purposes. Tips and bribes seemed to be the major problems faced by *the. borrowers obtaining loan from RAKUB. RAKUB crop credit brought positive impact on socioeconomic conditions of the borrower farmers.

Knowledge Management: Journal