ADHERENCE TO REPAYMENT OF LOAN IN MICRO FINANCE SYSTEM

Article enlighten the approach of SHGs members towards adherence to repayment of loan in micro finance system Finance is the essential condition for the any operations of the industry, services and even agricultural sector also. Rising of funds for the operations of any activity is important and strategic function. Cost of funds raising affect on the earning of the business activity. Funds must be raised from such sources which resulted lower cost of capital. Even individual also borrow loan at higher rate of interest for day to day operations. The raised funds must be strictly used for productive purposes. Individual persons made unplanned expenditure through loan amount. It affects the repayment capacity of the individual. Culture of repayment of loan must be essential for the development of financial system in the country. Attitude of repayment of borrowed loan must be totally positive. Many constraints caused to lower price to the agricultural goods. There are huge numbers of mediators for agricultural goods. Illiteracy of the farmers is one of the causes to cheat by the mediators. Some time cost of production of is not covered through selling of agricultural goods. Farmer's financial position is not uplifting as compared to economic development of the country. Investment in agricultural business is not considerable. Over population is engaged in agriculture. Dependency on agriculture sector is required to reduce. Per capita income of the farmer is low and it causes on capital investment in the agricultural sector. All these situation leads to indebt of the farmers. Farmers establish SHGs to solve their financial problems. They borrow loan and adhere to repay loan for social status. Mostly women SHGs members are more serious in repayment of loan taken from SHGs.