An Evaluation of Agricultural Credit System in Bihar and the Role of Credit Institutions in recent years.

Abstract

This article examines the agricultural credit system in Bihar and the role of Institutional credit agencies. Agriculture is a crucial sector for the state's economy, yet limited access to credit hampers its growth. Institutional credit agencies have contributed significantly by expanding lending services, implementing schemes like Kisan Credit Card and Priority Sector Lending, and partnering with government initiatives. Despite improvements, challenges such as low financial literacy among farmers, institutional agencies’s reluctance to finance agriculture, high dependence on informal credit, loan defaults, and procedural delays making credit flow complicated. This study emphasizes the need for enhanced financial inclusion, expansion of RRBs and Commercial bank branches in rural areas, implementation of crop insurance more effectively, digital banking, and policy reforms to further strengthen the agricultural credit system and support farmers in Bihar.