Vol. 9, Issue 8, Part B (2023)

The indebtedness of tribal households in Andhra Pradesh was in sharp contrast to the situation prevailing at the all India level. Not only was the percentage of indebted households high but even the amount of dues were also much higher than the corresponding all India figures. Much more alarming was the fact that nearly two-thirds of these loans were for unproductive purposes, that too from non-institutional agencies at a higher interest rates (20 per cent and above). Above all, non-tribals emerged as the single largest source of finance accounting for more than one-third of the borrowings of the tribal households in Andhra Pradesh. Administration of credit disbursement and recovery operations need a suitable and efficient network of institutional structure. Indiscriminate diversion of agricultural credit for unproductive purposes and wilful default of loan repayment hinder the smooth flow of agricultural loans. The SAO loans were used for agricultural purposes accounted for 83.8 and 76.3 per cent for non-defaulters and defaulters in Rampachodavaram while 71.3 and 65 per cent respectively in Seethampeta region. A very low number of borrowers used the loan amount for repayment of debts in both the regions. The proportion of outstanding amount among defaulters is more to the GPCMS compared with other sources of borrowings.