Abstract

In a modern agriculture, the proportion of purchased inputs including hired labour is high, and consequently, credit plays an important role, given the fact that small and marginal farmers dominate in the agricultural sector. This study attempts to identify the characteristics responsible for default with particular reference to crop loans specific to paddy (Punja season), the principal food crop of Kerala. The study was carried out in Alapuzha District of Kerala which forms a part of Kuttanad region. Primary data were collected from sample of 60 farmers. The selected farmers were classified into two groups: defaulters and non-defaulters of loans. Linear discriminant function analysis was the tool used to identify the variables that are important in discriminating between non-defaulters and defaulters and to classify borrowers accordingly on the basis of the differences in the selected characteristics. The study has concluded that marketed surplus, time of sowing and