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Loan Utilisation and Repayment Behaviour: Evidence from Farmers of Haryana


Subject and purpose of work:

The present paper assesses the loan utilisation and repayment behaviour of loanee or indebted farmers in Haryana, India.

Materials and methods:

The study was conducted in Haryana state. The study is based on primary data that have been collected through schedules from a sample of 600 indebted farmers. Proportionate sampling was employed. Further, a percentage is used for data analysis.


The study found that about half of the loan amount was utilised by farmers in nonproductive activities that directly stimulate the debt burden on them, because this type of expenditure did not contribute to the earnings of farmers. Further, around two-fifth of the farmers were regularly repaying their loans, one fifth were defaulters and remaining two-fifth were paying their loan irregularly. Overall, Farmers’ repayment behaviour is not satisfactory.


The non-productive usage of the loan amount is one of the main causes of their indebtedness. Reducing such expenditure is one of the main challenges for farmers without generating other sources of income.