An Economic Analysis of Credit Utilization Pattern and Credit Gap for Grape Cultivation and Value Addition (Raisin Making) in Vijayapura District of Karnataka, India

Credit is an important factor triggering agricultural growth when it is utilized properly. The present study aims to analyze the credit utilization pattern and credit gap for grape cultivation and value addition (raisin making) in Vijayapura district, which is having the highest area under grape cultivation in Karnataka state. As the grape requires high maintenance expenses, its economic analysis is of great importance in its present status. The primary data was collected from 90 respondent grape farmers in the study area. The finding of the study revealed that the sample farmers borrowed an average of ₹ 1,46,883 from all the institutional sources for grape cultivation, and the utilization of borrowed institutional credit for grape production was ₹ 1,09,376 (74.5%), and ₹ 37,507 (25.5%) of borrowed institutional credit was diverted for raisin production. For raisin making the sample farmers borrowed a total of ₹ 1,67,372 in credit from non-institutional sources in the study area. ₹ 138,440 (82.72%) of borrowed non-institutional credit was utilized for raisin making and ₹ 28,932 (17.28%) of borrowed credit was diverted other purposes by the sample farmers. The total credit gap was found to be 58.49, 59.97, and 59.12 per cent from commercial banks, regional rural banks, and cooperative bank/societies respectively. The findings also indicated that the sample farmers used the borrowed institutional and non-institutional credit more effectively to increase their revenue, diverting it less often for other uses. Many farmers do not receive institutional credit in an adequate quantity, at the appropriate time, or at a reasonable cost. Therefore, there is a need to focus on existing access and the quantum of formal credit used for agricultural purposes by different farmers in rural areas of Vijayapura district.