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The difference between urban and rural is most clear in Tables 2 and 3, showing the credit-to-district GDP and deposit-to-district GDP ratios for urban and rural India. In Table 2, the performance of South India's urban areas is marked. In Table 3, the urban areas of Uttar Pradesh and Bihar do surprisingly well. What of financial inclusion across sectors? As Table 4 shows, industry has a high credit-to-output ratio. But agriculture, in spite of focused lending, is below the 50 per cent mark. Worse off are small service enterprises. In terms of personal lending, Tables 5 and 6 show the costs of low financial inclusion.
Even for gold loans, in Table 5, the amount borrowers pay over the risk-free rate climbs sharply with access to finance. Table 6 shows the spreads above risk-free rates for home loans (low) through various other forms of financing, up to money lenders (high). Table 7 shows the geographical distribution of agricultural credit. Eastern India has more credit than cropping area would justify - but it is rain-fed, too, with more output variation and so probably requiring more smoothing over time. The Northeast is clearly ignored.
Another problem with agricultural credit is visible in Table 8. Rather than disbursing credit when it is needed - at the time of sowing, in May or November - banks lend at the end of the financial year, in March, to satisfy targets for priority-sector lending. Another problem: Table 9 shows that, in recent years, large farmers have started to monopolise agricultural lending. Finally, Table 10 shows that the biggest increase in non-performing assets in recent years has come in agriculture.
