Bridging the psychological and policy gaps: Enhancing farmer access to agricultural credit in India

Abstract

Majority of the farmers in India remain marginalized in accessing essential financial resources despite well-intentioned agricultural credit policies. This shows there is a significant gap in their implementation and execution. This study explores the disconnect between policy frameworks and real world application, highlighting the need for transformative agricultural credit policies. It also emphasizes addressing psychological barriers in farmers' perceptions of credit access. Through qualitative research methodology, seven focus group discussions were conducted across Dakshina Kannada district in India with participants including farmers, bankers, government officials, and NGO representatives. Each discussions comprised average of 9-12 participants based on their expertise and experience in agricultural finance. The discussions revealed several themes which includes key challenges such as poor accessibility, lack of inclusivity, and limited adoption of digital innovations that persist. The study underscores the necessity for tailored credit schemes, farmer training programs, and streamlined digital technologies to address the gaps in policy execution. Moreover, it emphasizes the need for further policy interventions like a single-window credit system, holistic evaluation methods, and incentives for sustainable farming practices. Additionally, it calls for a more rigorous focus on execution at the grassroots level, including the implementation of soil testing programs to promote long-term sustainability. While acknowledging regional limitations, this research highlights the urgency of addressing the disconnect between policy and practice, offering actionable insights to improve agricultural credit systems that better serve smallholder farmers and to support in achieving global sustainability goals.