Importance of credit availability to farmers in rural development:
(i) Growth of agricultural sector: Credit available to farmers for purchasing seeds, pesticides, tractors, equipments induces them to invest in agricultural activities. It leads to increase in agricultural production not only in case of subsistence crops but also cash crops.
(ii) Development of infrastructure: Credit facilities boost agricultural production. It induces the government to provide better infrastructural facilities for farmers like better irrigation facilities, better roads, power facility, godown facilities etc.
(iii) Balanced regional growth: If agricultural sector and infrastructure flourishes in rural areas, it promotes balanced regional growth and solve the problem of migration from rural to urban areas.