Exploring Factors Affecting Non-Performing Assets of Small and Marginal Farmers: Bankers Perspective

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Ram Bilas Agrawal, Dr. Prerna Srivastava, Dr. Mredu Goyal


Non Performing assets(NPA) of Small and Marginal farmer become burgeoning problem of banking sector in India. This paper attempts to study the non-repayment of loan instalments by the farmer’sspecially small & marginal farmers from a banker’s perspective. The NPA’s are affecting the performance of Banks adversely in the form of reduction in profit, interest-earning and management of loan accounts as a number of accounts are more in the small and marginal farmer category in the agriculture sector financed by banks.

A pilot study was conducted having a sample size of 60 responses from bankers through a structured questionnaire from bank branches situated in Rajasthan. By using EFA collected data were analyzed and found that farmers are not repaying loan instalments willfully presuming that Govt. will waive- off the loans, despite having resources. Banning the sale of agricultural land of small and marginal farmers, utilizing loanamounts for unproductive purposes and beyond capacity expenditure on social obligations, waiver of loans only to defaulters and no relief to good paymasters. The practical and theoretical impacts are discussed in the study which may be useful for policymakers.

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