Impact of Self Help Group Financing on Agricultural Production - An Empirical Analysis in Salem District of Tamilnadu

The small and marginal farmers constitute 80 percentage of the operational holdings and cultivate nearly 36 percentage of the area in India. Due to their small holdings, they are disadvantageously placed with respect to their access to technology, capital, credit and other institutional support. Hence to cater the credit need of the weaker sections such as small and marginal farmers, the Self Help Group linkage programme was introduced in 1992 by the National Bank for Agriculture and Rural Development. The idea of introducing the Self Help Group programme was initiated from the successful experiences of other countries. The linkage programme under National Bank for Agriculture and Rual Development aims to reach those outside the network of formal credit, improve living standards of poorer sections of rural society and achieve high deposit – credit mobilisation and recovery of loans. The number of self help groups linked with banks had increased from 255 in 1992-1993 to 1609586 in 2008 – 2009. In this backdrop, many studies had attempted to study the impact of microfinance on economic condition of poor. The findings of the study showed that marginal and small farmers were the beneficiaries of self help group. The farmer member of self help group were able to allocate the farm inputs efficiently. Additional amount of credit could increase the farm production of marginal and small farmers.