Different Persons Different Needs: An Analysis of Various Types of Loans in a Village Economy

Abstract

The present paper tries to identify the socio-political and economic characteristics of borrowers of different types of loans and loan sizes, on the basis of a primary household survey on around 300 households carried out in two villages in the district of North 24-Parganas in West Bengal, India. To this end, the type of loans taken are divided into five categories: consumption loans, working capital loans, loans taken for fixed investment, loans to meet social obligations, and loans taken to repay loans. The main results reveal that the nature of occupation, religion, political affiliation and land holding are important factors influencing the probability as well as size of loans taken for consumption and production purposes.