The demand for credit may reflect the response to credit supply. Largest gap was observed between the requirement and received amount of credit of small farmers (33%) followed by medium (25%) and large (18%). Overall costs for getting per Tk 100 loan were estimated to be at Tk 12.18 whereas highest cost incurred to small farmers (Tk 13.80) followed by medium (Tk 11.94) and large (Tk 10.87). Small farmers spent 48% of their total funds for MV Boro rice cultivation which stands higher than 35% for medium and 23% for large farmers indicating that small farmers were more efficient to utilize the credit in rice production purposes. Insufficient amount of loan, higher non-interest cost and complex credit rules were the major constraints as reported by 93%, 85% and 75% farmers respectively.
Utilization Pattern of Seasonal Agricultural Credit on MV Boro…show more content… Higher non-interest cost of institutional credit such as – application fees; stamp and documents required in support of loan; form filling and writing; cost of traveling for loan negotiation and undue demand of unscrupulous bank officials/brokers as entertaining cost for the small farmers act as a hindrance to the development of their productive forces reported by 85% of total respondents. About 82% farmers mentioned that strong need for collateral in institutional sources in turn imposes many types of formalities on credit seekers that make them finally penchant for taking loan from semi-institutional and non-institutional sources though their interest rate is quite higher. About 53% farmers think that long institutional procedure as another impediment in securing loans from institutional source. Farmers reported (63%) that lengthy process of sanctioning credit was not only the barrier to get credit, but also they lost interest to receive credit next