Credit or loans to cope with drought conditions

In this study, households took credit or loans to cope with drought. A third of households studied reported that easy repayment procedures and instant coverage of risk were the major reasons for taking credit and loans. Official sources (banks, cooperatives, and self-help groups) accounted for a little over half of the loans in the study region. In other areas, loans were not functioning due to a lack of detailed activity plan and no revolving fund. Communities approach banks and private money lenders for availing the loan facilities.

Climate Related Risk

Drought

Form of Option

Economic

Country of Origin

India

Beneficiaries

Households

Implementation

The option exists in a real setting and was not created as part of the project.

Institution / Legal Reach

Change in economic instruments (e.g. subsidies, taxes)