INTRODUCTION-

The following research was conducted by a group of four students

in our class for a class assignment that asked us to collect information about
farmers in our community and analyse their financial needs as well as the
credit they required.
This assignment required the recommendation of appropriate financing
institutions as well as financial planning. While we, as students, had the
opportunity to study about how financial institutions work and give
recommendations to farmers.

1.FARMER 1:
 Name: Myakala Sammaiah
 Age: 45 years
 Family Members in the Family : There are 5 members in his family.
 Earning Member in the Family : Sammaiah (father) Bhagya (mother)
 Source of Income : Farming.
 Size of Land Holding: 7 Acres
 Crops Sown in a year or Season: Kharif (6.5 Acres of Rice, 0.5 Acre of
Cotton)
Rabi: (5Acres of Rice,2Acres of Maize)
Loan Taken –
The farmer Myakala Sammaiah had took a loan amount of 1 lakh from
Telangana Gramena Bank on june 16th 2020. It is a Crop loan and the farmer has
KCC( Kisan credit card) at an interest rate of 7% (7\12=0.58Rs per 100) for a
duration of 2 years.
Documents required by the bank :
Aadhaar card , Pan card, Land Passbook , Passport size photo, Bank Account
Statement, Letter from any authorized person
Analysis of the Loan:
 Type of Loan: Crop Loan
 Purpose: Productivity Purpose
 Source of Loan: Telangana Gramena Bank ( Institutional Loan)
 Amount: 1 Lakh
 Repayment Period: 2 years
 Calculation :
Principle Amount: 100,000 Rs/-
Rate of Interest: 7% (7\12=0.58rs per 100)
Time Duration:2 years
Interest Amount = 100,000*7*2 = 14,000/- Rs
100
Total Amount = 100,000 + 14,000 = 1,14,000/- Rs
A sum amount of 1,14,000/- rupees has to be repaid by the farmer to the bank in
a time span of 2 years (24 months) so the monthly installment is as follows:
Total amount /total time =1,14,000/24 = 4750 per month.
Hence, The farmer Myakala Sammaiah has to pay an monthly installment of Rs
4750 for the duration of 2 years.
The Annual income and repayment capacity of the farmer:(Estimated Values)

Particulars Amount (Rs)

Gross Returns 700,000/-

Working expenses Excluding crop loan 200,000/-

Family Living Expenses 30,000/-

Other loan dues 50,000/-

Miscellaneous Expenditure 10,000/-

Crop loan 100,000/-

Repayment capacity 3,10,000/-

 Repayment capacity = Gross Returns – (Working Expenses Excluding crop loan +

Family Living Expenses + Other loan dues + Miscellaneous Expenditure + Crop loan)
Interpretation:
The farmer generated a gross income of 700,000/- with a loan amount of
100,000/- his repayment capacity stood at 3,10,000/-.
This indicates that the farmer has a good amount of scope to clear the loan
which he has taken.
Farmer planning to take a loan for the next cropping season:
Yes, the farmer is planning to take the new crop loan for the upcoming seasons
Because he was planning to dig a well near his agricultural land so he required
loan amount.
Suggestions to the farmer:
I have suggested him to pay the loan amount (principle and interest ) before
time duration of loan because in Telangana Gramena Bank they are giving a
discount of 3% of interest when the farmer pays the loan amount on time. After
paying the loan amount on time the bank will return the 3% of interest amount
in to the farmer (borrowers) Account.

The Agriculture credit Schemes availing by the farmer are –

1. Rythu Bandhu Scheme-
This is an agriculture credit scheme introduced by the Telangana
government. According to this scheme the farmer will receive a credit of
Rs 5000 per acre for both Kharif and Rabi Season hence the farmer
Myakala Sammaiah is receiving a credit of 7 acres * 5000=35,000 Rs /-
per 1 season and 70000Rs /- for 1 year.

2. PM Kisan Samman Nidhi Yojana-

This is an agriculture credit scheme introduced by government of
India. According to this scheme the farmer is receiving a credit of total
6000Rs for 1 year in 3 installments (2000 per Installment)
2.FARMER 2:
 Name: Thota Thirupathi
 Age: 48years
 Family Members in the Family : There are 4members in his family.
 Earning Member in the Family : Thirupathi (father) Swarupa (mother)
 Source of Income : Farming.
 Size of Land Holding: 5 Acres
 Crops Sown in a year or Season: Kharif (1Acres of Rice, 4 Acre of
Cotton)
Rabi: (1Acres of Rice,4Acres of Maize)
Loan Taken –
The farmer Thota Thirupathi had took a loan amount of 1 lakh from his Relative
in the month of February 2021. It is a Non Institutional Loan as he took the loan
amount from his relatives for the purpose of digging the well at his farm at an
interest rate of 18% (18\12=1.5Rs per 100) for a duration of 1 years.
Documents required by the bank :
As the loan is taken from his relative (Non Institutional) he didn’t submitted any
id proof or pan card but a letter of surety is given to his relative.
Analysis of the Loan:
 Type of Loan: Non institutional Loan
 Purpose: Productivity Purpose
 Source of Loan: Relatives (Non Institutional Loan)
 Amount: 1 Lakh
 Repayment Period: 1 years
 Calculation :
Principle Amount: 100,000 Rs/-
Rate of Interest: 18% (18\12=1.5 per 100)
Time Duration:1 years
Interest Amount = 100,000*18*1 = 18,000/- Rs
100
Total Amount = 100,000 + 18,000 = 1,18,000/- Rs
A sum amount of 1,18,000/- rupees has to be repaid by the farmer to the bank in
a time span of 1 years (12 months) so the monthly installment is as follows:
Total amount /total time =1,18,000/12 = 9833.3 per month.
Hence, The farmer Thota Thirupathi has to pay an monthly installment of Rs
9833.3 for the duration of 1years.
The Annual income and repayment capacity of the farmer:(Estimated Values)

Particulars Amount (Rs)

Gross Returns 500,000/-

Working expenses Excluding crop loan 1,40,000/-

Family Living Expenses 40,000/-

Other loan dues 60,000/-

Miscellaneous Expenditure 10,000/-

Crop loan 100,000/-

Repayment capacity 1,50,000/-

 Repayment capacity = Gross Returns – (Working Expenses Excluding crop loan +

Family Living Expenses + Other loan dues + Miscellaneous Expenditure + Crop loan)

Interpretation:
The farmer generated a gross income of 5,00,000/- with a loan amount of
100,000/- his repayment capacity stood at 1,50,000/-.
This indicates that the farmer has a good amount of scope to clear the
loan which he has taken.
Farmer planning to take a loan for the next cropping season:
Yes, the farmer is planning to take the new crop loan for the upcoming
seasons
Because he was planning to purchase a irrigation motor pump for his
borewell.
Suggestions to the farmer:
I had strongly suggested the farmer for not to take loan amount from Non
institutional agencies because the interest rate (18%) is very high when
compared to institutional agencies interest rate (7%) so I suggested him to
take crop loans from certain banks which are offering less rate of
interest.
The Agriculture credit Schemes availing by the farmer are –
1.Rythu Bandhu Scheme-
This is an agriculture credit scheme introduced by the Telangana
government. According to this scheme the farmer will receive a credit of
Rs 5000 per acre for both Kharif and Rabi Season hence the farmer Thota
Thirupathi is receiving a credit of 5 acres * 5000=25,000 Rs /- per 1
season and 50000Rs /- for 1 year.

2.PM Kisan Samman Nidhi Yojana-

This is an agriculture credit scheme introduced by government of
India. According to this scheme the farmer is receiving a credit of total
6000Rs for 1 year in 3 installments (2000 per Installment)
3.FARMER 3:
 Name: Budige Kumaraswamy
 Age: 47years
 Family Members in the Family : There are 3members in his family.
 Earning Member in the Family : Kumaraswamy (father)
Padma(mother)
 Source of Income: Farming.
 Size of Land Holding: 4 Acres
 Crops Sown in a year or Season: Kharif (3Acres of Rice, 1 Acre of
Cotton)
Rabi: (2Acres of Rice,2Acres of Maize)
Loan Taken –
The farmer Kumaraswamy had took a loan amount of 80,000/-Rs As Gold Loan
from the SBI Bank . It is a Institutional Loan as he took the loan amount from
the bank for the Agriculture production purpose at an interest rate of 7.50%
(7.50\12=0.62Rs per 100rs) for a duration of 2 years.
Documents required by the bank :
Aadhaar card , Pan card, Passport size photo, Bank Account Statement, Letter
from any authorized person and Gold as security.
Analysis of the Loan:
 Type of Loan: Gold Loan
 Purpose: Productivity Purpose
 Source of Loan: State Bank Of India ( Institutional Loan)
 Amount: 80,000/-Rs
 Repayment Period: 2 years
 Calculation :
Principle Amount: 80,000 Rs/-
Rate of Interest: 7.5% (7.5\12=0.62rs per 100rs)
Time Duration:2 years
Interest Amount = 80,000*7.5*2 = 12000/- Rs
100
Total Amount = 80,000/- + 12,000 = 92,000/- Rs
A sum amount of 92,000/- rupees has to be repaid by the farmer to the bank in a
time span of 2 years (24 months) so the monthly installment is as follows:
Total amount /total time =92,000/24 = 3833.3per month.
Hence, The farmer Budige Kumaraswamy has to pay an monthly installment of
Rs 3833.3 for the duration of 2 years.
The Annual income and repayment capacity of the farmer:(Estimated Values)

Particulars Amount (Rs)

Gross Returns 4,50,000/-

Working expenses Excluding crop loan 1,00,000/-

Family Living Expenses 30,000/-

Other loan dues 60,000/-

Miscellaneous Expenditure 10,000/-

Crop loan 80,000/-

Repayment capacity 1,70,000/-

 Repayment capacity = Gross Returns – (Working Expenses Excluding crop loan +

Family Living Expenses + Other loan dues + Miscellaneous Expenditure + Crop loan)

Interpretation:
 The farmer generated a gross income of 4,50,000/- with a loan amount of
80,000/- his repayment capacity stood at 1,70,000/-.
This indicates that the farmer has a good amount of scope to clear the
loan which he has taken.
Farmer planning to take a loan for the next cropping season:
Yes, the farmer is planning to take the new crop loan for the upcoming
seasons
Because he was planning to purchase some agricultural land .
Suggestions to the farmer:
I had appreciated the farmer for opting the gold loan amount from SBI
Bank (institutional Agencies)because SBI is the only bank providing the
gold loan at low interest rate (7.5%) when compared to other banks like
HDFC Bank interest rate (9.9%) and ICICI Bank (11%) and Axis Bank
(15%) and I also suggested him to go for crop loan at Telangana Gramena
Bank where the interest rate is low for crop loan(7%).
The Agriculture credit Schemes availing by the farmer are –
1.Rythu Bandhu Scheme-
This is an agriculture credit scheme introduced by the Telangana
government. According to this scheme the farmer will receive a credit of
Rs 5000 per acre for both Kharif and Rabi Season hence the farmer
Budige Kumaraswamy is receiving a credit of 4 acres * 5000=20,000
Rs /- per 1 season and 40000Rs /- for 1 year.

2.PM Kisan Samman Nidhi Yojana-

This is an agriculture credit scheme introduced by government of
India. According to this scheme the farmer is receiving a credit of total
6000Rs for 1 year in 3 installments (2000 per Installment)

4.FARMER 4:
 Name: Koluguri Rajireddy
  Age: 50years
 Family Members in the Family : There are 3members in his family.
 Earning Member in the Family : Rajireddy (father) Shoba(mother)
 Source of Income: Farming and Diary
 Size of Land Holding: 9 Acres
 Crops Sown in a year or Season: Kharif (8Acres of Rice, 1 Acre of
Cotton)
Rabi: (6Acres of Rice,3Acres of Maize)
Loan Taken –
The farmer Rajireddy had took a loan amount of 2,00,000/-Rs from his friend .
It is a Non Institutional Loan as he took the loan amount from his friend for the
Agriculture production purpose at an interest rate of 24% (24\12=2Rs per 100rs)
for a duration of 2 years as simple interest.
Documents required by the bank :
As the loan is taken from his friend(Non Institutional) he didn’t submitted any
id proof or pan card but a letter of surety is given to his friend.
Analysis of the Loan:
 Type of Loan: Non institutional Loan
 Purpose: Productivity Purpose
 Source of Loan: friend (Non Institutional Loan)
 Amount: 2 Lakh
 Repayment Period: 2 years
 Calculation :
Principle Amount: 200,000 Rs/-
Rate of Interest: 24% (24\12=2rs per 100rs)
Time Duration:2 years
Interest Amount = 200,000*24*2 = 96,000/- Rs
100
Total Amount = 200,000 + 96,000 = 2,96,000/- Rs
A sum amount of 2,96,000/- rupees has to be repaid by the farmer to the bank in
a time span of 2 years (24 months) so the monthly installment is as follows:
Total amount /total time =2,96,000/24 = 12,333.3 per month.
Hence, The farmer Koluguri Rajireddy has to pay an monthly installment of Rs
12333.3 for the duration of 2years.
The Annual income and repayment capacity of the farmer:(Estimated Values)

Particulars Amount (Rs)

Gross Returns 800,000/-

Working expenses Excluding crop loan 2,50,000/-

Family Living Expenses 40,000/-

Other loan dues 60,000/-

Miscellaneous Expenditure 10,000/-

Crop loan 200,000/-

Repayment capacity 2,40,000/-

 Repayment capacity = Gross Returns – (Working Expenses Excluding crop loan +

Family Living Expenses + Other loan dues + Miscellaneous Expenditure + Crop loan)

Interpretation:
The farmer generated a gross income of 8,00,000/- with a loan amount of
200,000/- his repayment capacity stood at 2,40,000/-.
This indicates that the farmer has a good amount of scope to clear the
loan which he has taken.
Farmer planning to take a loan for the next cropping season:
Yes, the farmer is planning to take the new crop loan for the upcoming
seasons
Because he was planning to purchase a tractor in next upcoming year.
Suggestions to the farmer:
I had strongly suggested the farmer for not to take loan amount from Non
institutional agencies because the interest rate (24%) is very high when
compared to institutional agencies interest rate (7%) so I suggested him to
take crop loans from certain banks which are offering less rate of interest.

The Agriculture credit Schemes availing by the farmer are –

1.Rythu Bandhu Scheme-
This is an agriculture credit scheme introduced by the Telangana
government. According to this scheme the farmer will receive a credit of
Rs 5000 per acre for both Kharif and Rabi Season hence the farmer
Koluguri Rajireddy is receiving a credit of 9 acres * 5000=45,000 Rs /-
per 1 season and 90000Rs /- for 1 year.

2.PM Kisan Samman Nidhi Yojana-

This is an agriculture credit scheme introduced by government of
India. According to this scheme the farmer is receiving a credit of total
6000Rs for 1 year in 3 installments (2000 per Installment)