Assessing Institutional Agricultural Credit Constraints as Perceived by Farm Households in Assam, India

Abstract

This study presents an exploratory, field-based assessment of the constraints affecting farmers' access to institutional agricultural credit in two agriculturally important districts of Assam, focusing on demand-side, supply-side, and infrastructural barriers. Based on survey data from 50 credit-recipient farmers across Sonitpur and Nagaon districts, the study employs mean-score ranking and correlation analysis to assess the relative severity of these constraints and their association with socio-economic variables. Supply-side constraints recorded the highest category mean (3.48), with complicated and lengthy loan procedures ranked first (Mean = 4.34). Findings reveal that supply-side barriers—particularly complicated and lengthy loan procedures and strict eligibility criteria—together with the absence of insurance and weak extension services, are perceived as the most severe barriers, while demand-side constraints such as lack of collateral and awareness are also significant. Demand-side constraints are found to correlate significantly with landholding size under Spearman's rank correlation, while supply-side and infrastructural constraints do not vary significantly with the socio-economic profile of respondents. Policy recommendations emphasise simplifying loan procedures, expanding insurance and guarantee schemes, strengthening financial literacy and extension services, and improving rural financial infrastructure. The study is exploratory, based on a small sample of credit recipients and cross-sectional self-reported perceptions, and its only significant correlation does not survive multiple-comparison correction; findings should therefore be read as indicative of the study area rather than generalisable.