Study on Characteristics in Discriminating Defaulters and Non-Defaulters of Agricultural loan: A Case of Saurashtra Gramin Bank in Gujarat

The Junagadh district having wide network of Saurashtra Gramin Bank (SGB) branches was purposively selected for the study area. In all 73 respondents from Non-defaulters and 75 from defaulters were selected on the basis of highest numbers of defaulters from 11 villages spread over 3 talukas, following multistage sampling technique. The data were collected for the period from 1992–93 to 2007–2008. The discriminant function analysis indicated higher mean difference in case of consumption expenditure, percentage of irrigated area to total area and nitrogen consumption. On the basis of relative importance of characteristics in discriminating two groups (defaulters and nondefaulters), nitrogen consumption, potash consumption and consumption expenditure were found the most important factors. Their contributions were 65.62, 13.21 and 10.09 per cent, respectively. It was felt that there is need to educate the borrowers regarding end-use of credit for timely repayment of loans. The cost of credit for target-group should be relatively lower than the cost of credit to the non-target group of borrowers.