As much as 88 percent of the rural poor households in Kerala, constituting 44 percent of the population, are at various stages of indebtedness, says a pre-COVID-19 study by the Kochi-based Centre for Socio-Economic and Environmental Studies (CSES).
The percentage of total rural household in debt in the State is 49.5 percent and the national average for rural indebtedness is 31.5 percent, say CSES researchers.
The study covered households with yellow and pink ration cards and the primary survey was conducted among 540 households in 12 districts (36 wards) with three wards and 45 households drawn from each panchayat on random sampling basis.
A structured pre-tested questionnaire, interviews, focus group discussions, and case studies were carried out to discover the borrowing pattern made up of credit choices and purpose of borrowing, extent and magnitude of indebtedness, and strategies adopted by families to manage debt pressure and address issues related to indebtedness.
The level of indebtedness is nearly the same across social categories, the study says, underlining the finding that 93% of the indebted households depended on formal sources of loans while 56 percent had also borrowed from informal sources.
Cooperative financial institutions topped the list of sources fulfilling credit requirements but the Kudumbashree Mission has emerged as a major source for formally borrowings. About half of the indebted households have borrowed from primary agricultural cooperative credit societies.
It was found that the number of loans in the name of a female member of the household was 2.5 times the number of loans in the name of a male member. “This wide difference could be mainly attributed to the fact that certain loans such as Kudumbashree loans and micro-finance institutional group loans are available only to women,” the study says.