Sources of Rural Credit

Rural credit comes from various sources to support farmers and rural businesses. Key sources include:

1. Commercial Banks

• Provide loans at competitive interest rates.
• Example: Farmers can borrow for purchasing seeds and fertilizers.

2. Regional Rural Banks (RRBs)

• Focus on rural areas to boost agricultural development.
• Offer tailored loans for small-scale farmers.

3. Cooperatives

• Help members pool resources for loans.
• Example: A farmer’s cooperative might offer credit for machinery.

4. Self-Help Groups (SHGs)

• Encourage savings and provide small loans.
• Empower women by funding their small businesses.

5. Land Development Banks

• Specialize in long-term loans for agricultural investments.
• Example: Loans for purchasing land or heavy machinery.

These sources play a vital role in ensuring farmers have access to necessary funds for their agricultural needs.