Abstract

The study was conducted on the banking habits amongst farmers in rural areas of Shimoga district . The main objective was to study the banking habits amongst farmers in general with special reference to rural areas of Shimoga district and analyse the deposits and borrowing habits amongst farmers. The study also analysed farmers’ understanding of various facilities available to them by the government through commercial banks, co-operative banks and primary land development banks.
The banking habits amongst farmers was examined using empirical data from stratified and area sampling, which covered over 80 households around rural areas of Shimoga district.
Results of the present study indicates that although banks have been set up to provide finance, farmers do not have an easy access to these sources. Majority of the respondents opined that the interest rates provided by the banks are high. As a result of this , farmers prefer co-operative societies over banks. The cumbersome process of fulfilling documentary requirements for obtaining a loan acts as a deterrent to the illiterate farmers who are approaching these sources. Though the interest rates have been kept lower in banks, most of the farmers prefer informal loans through money lenders because of timely and adequate availability of loans. So it is essential to address these issues inorder to improve the banking habits amongst farmers in rural areas. It is with this background that this research paper analyses banking habits amongst farmers in rural areas in general and in Shimoga district of Karnataka state in