An economic assessment of a special credit programme for small farmers in Bangladesh from the viewpoint of non-participants

Abstract

One of the main objectives of this study is to evaluate the performance of the Tk.1000 million Special Agricultural Credit Programme (SACP) with respect to its stated objectives . The main objective of this programme is to increase the flow of institutional credit in the rural financial market in general and to provide credit to the small, marginal farmers and share-croppers in particular. Such farmers constitute the overwhelming majority of the farming population.

This study based on a survey conducted by the Bangladesh Bank (Central Bank of the Country) one year after launching the Programme. In the survey data were collected simultaneously from those respondents who participated in the Programme and those who did not participate In the Programme. The characteristics of those respondents who did participate in the Programme have been analysed by the study team who were involved in the survey and a report has been submitted to the Bank. study was concerned with the 'dual' part of the survey, that is,

respondents who did not participate in the Programme. In concentrating on the dual survey, the general hypothesis' was that those respondents who did not participate in the programme were mostly small farmers. The results of our analysis supported this hypothesis which is further confirmed by the results of the primal survey . The overall results suggest that the Tk. 1000 Million Special Agricultural Credit Programme failed to meet its major objective. Another important task of this study is to analyse the nature of the demand for credit among the farming households. The analyses undertaken indicate that the demand for credit among the non-participants in the Special Credit Programme varies according to farm size and the tenurial status of a farmer. Furthermore, regional differences also influence the demand for credit. Show more