Disbursement of Credit by KSFC to Agro and Non-Agro Industries in Karnataka: A critical economic analysis

KSFC is providing financial assistance to the priority sector with maximum emphasis on food processing industries. The purposive sampling technique was adopted in designing sampling frame for the study. The Hyderabad-Karnataka region was purposively selected, which is industrially a backward region of the state. The secondary data were collected from KSFC branch offices of selected districts and states as a whole for a period of 14 years from 2000–01 to 2014–15. Compound growth rate analysis indicated that growth in number of units sanctioned and loan amount disbursed for agro-industries were 0.16 and 13.08 per cent per annum and were significant in H-K region. Similar trend of growth was observed in disbursement of loan to non-agro industries. The share of agro based industries in the total number of units sanctioned and credit disbursed by KSFC in H-K region was 35.39 and 44.96 per cents respectively. However, share of ABI's was very low with 16.39 and 12.91 per cents for number of units sanctioned and credit disbursed at the state level during the study period. The total number of micro, small and medium enterprises(MSME) of the sanctioned agro based industries indicated that H-K region accounted 33.78 and 12.31 per cents of total ABI's and non-ABI units sanction by KSFC in the state.