The next in importance are medical emergencies and farm/ crop loans, which account for 20 per cent and 18 per cent respectively of loan takens. These three requirements account for 73 per cent of the loan requirements of rural earners.

At the next level come the need for homes/ land, business requirements and social obligation, which account for 12 per cent each. Says Sabharwal: “The requirements for emergencies are there but there is enough demand to finance pre-harvest agricultural implements and the post-harvest needs that come to banks.”

When it comes to taking small loans, banks’ share stands at 26 per cent and trails the loans taken from relatives, which stands at 42 per cent of the total sourced. Money lenders closely follow banks with 21 per cent.

Adds Kumar, “banks will have to come up with some innovative ways to give consumption loans so as to create productive assets.” Banks are organised lending institutions and their retreat raises concern.

According to Sabharwal, “The banks share will increase with the increasing distribution network, which all banks are working towards. Banks’ transparency is high and the interest rates charged by them are lower compared to money lenders.”