Savings & Debt

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Savings and Debt Behaviour of Rural Household in

Tripura with special Reference to North and West District

Pranesh Debnath*

Abstract:

In the light of earlier studies on the topic of saving and debt, the present study itself

addressed to study the saving and debt behavior of the rural households of Tripura. In this

paper researcher has collected the primary data through schedule by enumerator from two

district out of eight districts by convenience sampling as per convenience of the researcherand secondary data has been collected from different government report. This study tried to

identify the factors influencing saving and debt behavior together with the financial service

institute involving in the mobilizing of rural savings and facilitating the required financial

assistance to rural households. The present study found that most of the rural households are

subjected to savings but propensity is low. The study also found that education level of

earners is positively related to their income level.

Key Words: Savings and Debt Behaviour, Rural Households, financial service, rural

savings.

*Research Scholar (SET-North East, UGC NET{JRF & AP Both)

Tripura University

Email ID: [email protected]

(M): +91-9612615606

mailto:[email protected]






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Introduction:

Saving is an indispensable word for measuring economic behavior of human beings. „Saving‟

are the unconsummated earning of and individual consumption & capital formation including

investment. Saving is the difference between income and consumption. Income is human‟s

earnings that is earned from all his sources during a year. Sources of income can be salary

from job, business profit, corporate profit, interest payments, earning from farm production,

crop‟s earning etc. Consum ption is the total amount of goods and services that is consumed

by households during a year. Consumption includes expenditure on food, clothing, housing,

rent, education. To study on rural savings in India need to look into four aspects namely the

determinants of savings, the composition of savings, the methods of measuring savings, and

the pattern of savings. The present study tries to identify the savings pattern and the

institutions involved in saving practices in rural Tripura. Saving is an important

macroeconomic variable to be studied under the purview of the economic arena on an

individual‟s as well as household basis. According to classical economists like Adam Smith,

David Ricardo and J.S.Mill, „Saving is an important determinant of economic growth”.

Keynes (1936) identified absolute disposable income as the important determinant of saving.

Other two post-Keynesian theories, Friedmans (1957) Permanent Income Hypothesis (PIH)

and Modigliani‟s (1963) Life Cycle Hypothesis (LCH) explains the determinants of savings

point out that other variables also affect the savings of the households. These three traditional

theories and their variants have been extensively used in research studies focusing on the

household saving behavior in developed and developing countries.

Political economists examine debt as a relationship of power and exploitation and as a source

of inequalities. Sociologists & anthropologists approach debt as a social relationship and are

interested both in the diversity & ambivalence of debt, analyzing how debt may stifle or

protect, create & reinforce hierarchies but also maintain, update & build solidarities &

identifies.



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.

Importance of Savings:

Saving is one of the main factors to economic growth, once saving help create investment,

production, employment and finally enhance economic growth. Countries which have high

rate of national saving are not mainly depend on foreign direct investment or external saving

which create chance of risk from unstable currency. From the classical days, saving has been

considered as one of the determinants of growth. To lead the underdeveloped countries to the

path of development, rate of savings provide a cushion of security against future

contingencies, whereas for the nation, savings provide the funds needed in the developmental

efforts.

Aggregate savings in any economy depends on a number of independent variables. In the

Indian economy, the household sector contributes larger share, 24.4 percent share in GDP in

12th five year plan and hence , to step up savings in the economy, saving rate of the

household sector should be steeped up both in the rural and urban sectors.

Types of Savings

The types of saving are mainly based on the income available to the household, firm and

corporate bodies. For the estimation of domestic „saving‟ the whole economy is broadly

classified into three institutional sectors i.e.

a. household

b.

private corporate

c. public.

1.

Saving Habit/ Savings Propensity

Saving is that part of income which is not consumed or not spent. The propensity to save

is nothing but a tendency to save. Every individual who earns income has a common

tendency not to spend the entire amount, but to save some part of that income. This

human tendency to save part of their income itself is a propensity to save. Technically the

propensity to save is a ratio of total saving to total income.



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2. Debt Habit

Debt habit is a tendency to owe money from others. Many corporations, Individuals use

debt as a method for making large purchases that they could not afford under normal

circumstances. Their certain spending habits that lead to debt like, spending more money

than earning, spending money you don‟t have, using debt to pay off debt etc.

3. Savings and Debt Pattern of Rural Households in India with Special Reference to

Tripura

In India the household sector contributes a lion share of the total savings in economy in 2011-

12 household sector share 22.3 percent of GDP (Central Statistical Organization,2012) , in

spite of low per capita income the rural households have a tremendous saving potential. In

India, the rural households, savings are made through traditional credit rotation groups, or

purchase of domestic animals. Gradually, the traditional way of saving in rural region has

been abolished; the people shifted their saving in form of physical assets, like gold, land and

durable goods and financial assets like shares, stocks and bonds. The Formal and Informal

Financial Institution are available who provide savings facilities to the rural people.Microfinance Institutes and Micro enterprises are playing important role now-a-days in rural

region, and rural people are also saving in these types of institutions. The rural households

are saving through different Formal and Informal financial institutions, Microfinance

institutions and Micro enterprises.

In India there are two sources of debt are available for the rural households-Institutional and

Non-institutional. Institutional debt refers to the loans provide by co-operative societies and

co-operative banks, commercial banks including regional banks. Non-institutional or private

source include Agricultural & Professional money-lenders, Landlords, traders & commission

agents, relatives and others. There are many rural credit agencies also known as

Microfinancing Institutions including SHGs, NGOs, and NBFCs.

In Tripura all these Institutional and Non-Institutional agencies are giving credit facilities to

the rural households. According to All India Debt and Investment survey, 1991-92, in Tripura

26.5 percent are using Government agency, 12.8 percent are from Cooperatives, 49.9 percent



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from commercial banks, 0.0 percent from landlords, 1.9 percent from Agricultural

&Professional Money lenders, 2.6 percent from traders & Commission Agents, 6.1 percent

from Relatives and 2 percent from others (Source-All India Debt and Investment Survey,

1991-92).

Literature Review:

Salam and Kulsum (2000) analyzed saving behavior in India and reveals that household

sector saving provided the bulk of national saving. The share of total household saving to the

total national saving has gone up from 75.9Percent in 1980-81 to 82.7 Percent in 1998-99.

The public sector saving rate declined but the corporate saving rate improved. The declining

trend of public sector saving is attributable to the negative saving of Government

administration.

Nayak (2013) examined in her study on different determinants of saving behavior has

shown a considerable significance and non-significance of different variables which helped in

analyzing the determinants of the saving behavior in the rural households of the Sundergarh

district of Odisha ,India. The different variable like gender, age , primary occupation,

educational qualification, possession of land, house type, number of family members and the

marital status of the individuals has been analyzed by showing a relationship with different

determinants affecting saving behavior like change in savings, income towards saving, type

of savings, amount of savings, problem relating to saving, type of accounts available in

banks, parental or own savings, wish to save each month and any time got cheated from any

financial institutions. The study also found that there has been a significant change in the

levels and density of savings pattern of the rural households because of the increase in saving

opportunities available with a convenient bar. The increase in the financial institutions like

banks, micro finance institutions, SHGs and other local banks provided an opportunity to the

rural people to save more.

Kelly and Williamson (1968) regressed per capita household saving against per capita

household income for five household age groups in Indonesia. They found that the age of the

head of the household is an important determinant of household saving in rural households

and that the average and marginal saving rates rose with the share of agricultural income and



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the presence of positive interaction between wealth and saving. However, Shultz (2005) who

analyzed the demographic determinants of savings in Asia found no significant relationship

between savings and age composition

Prema-Chandra and Pang-Long (2003) examined the determinants of household saving in the

process of economic development, in the light of the Taiwanese experience during the period

1952-99. They found that the household saving rate rises with both the level and the rate of

growth of household disposable income and that the real deposit rate has a significant

positive impact on saving. Public saving they discovered seems to crowd out private saving,

but less than proportionately and that while both old- and young-dependency in population

have a negative impact on the saving rate, the magnitude of the impact of the former is far

greater than that of the latter. Finally, they concluded that increased availability of social

security provisions and enhanced credit availability also seem to reduce saving.

Bhalla (1978) investigated the effects of sources of income and investment opportunities on

the saving behaviour of farm households in India. He used the survey data collected by

National Council of Applied Economic Research (NCAER) during the three years starting

from the year 1968-1969 and found that the propensity to save out of non-agricultural income

was higher than the propensity to save out of agricultural income. The permanent income

hypothesis (PIH) offers an explanation for this difference in propensity. He also found that

investment opportunities increase saving, ceteris paribus, for the subsistence group of

household and had a negative effect for the non-subsistence group.

Issahaku (2011) identified the age composition and assets do not have a major effect on

saving in. There is the propensity to save and invest in Nadowli the Upper Western Region of

Ghana in spite of low income. There are factors having positive and negative influence on

saving and investment behavior of households in Nadowli. Whereas the levels of income,

educational status, occupation, have positive influence on saving, the number of dependents

exerts a negative influence on saving. The paper found that age composition and assets do not

have a significant effect on saving. The factors that drive household investment are

occupation, expenditure, assets and saving.



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Siddiqi et.al (1995) determined saving capacity of the rural households on the basis of

disposable income. The study results revealed that rural households with higher disposable

income were found saving in higher portion of their income. As far as the saving pattern of

farm and non-farm households is concerned, the Average Propensity of non-farm households

was higher relative to farm households. In his paper Buragohain (2009) discussed the trend

and pattern of savings in general and household sector savings in particular and assessed the

major determinants of household sector savings based on fundamental theory. The time series

data consisting of four elements corresponding to (a) seasonal fluctuations, (b) cyclical

variations, (c) systematic trend and (d) residual. In an annual time series, seasonal

fluctuations are automatically eliminated in the aggregating/averaging of

weekly/monthly/quarterly income, consumption and savings. Three or five yearly moving

averages of annual values eliminated the transitory component corresponding to short-run

cyclical element, leaving only trend and residual components of the series has used as the

methodology. In this study an attempt is made to test similar hypotheses based on

fundamental theories of savings and investment and to identify some variables which by

intervention can increase savings and investment in India. The results show that average

propensity to save, Marginal Propensity and income elasticity of savings using have been

increasing mostly on economic resurgence period (1990-2007). This implies household

disposable income is the better determinants for household savings and it increased with

increase in income, satisfied the Keynesian hypothesis with recent data.

Hyun et.al (1979) documented the study of the extent of savings in representative rural

households in South Korea during 1962-76. They used a technique for measuring permanent

income from cross-section data to estimate marginal savings behavior. The result shows that

farm households of south Korea save a remarkably large part of their incomes. The second

finding is that useful measures of permanent and transitory incomes can be estimated fromcross section data and that these estimates can be helpful in better understanding savings

behavior.

Pickersgill (1976) in his paper Soviet Household Saving Behavior empirical study of

determinants of household savings demonstrates a stable relationship between real per capita

household saving and real per capita disposable income in the Soviet Union. The substitution

of a formulation of permanent income for current income improves the relationship and



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indicates that saving is influenced by recent past income and that households save a

substantially larger proportion of transitory than permanent income.

Akpan et al. (2011) determined factors that affect household saving of rural agro-based firm

workers in the south-south region of Nigeria. Two-stage least squares method of

simultaneous equation model was used in the analysis. Cross-sectional data were collected

from 250 randomly selected workers of five agro-based firms in the study areas. The results

of the analysis revealed that income, tax, job experience, education, family size and

membership of a social group influence saving attitude of workers. To promote household

savings among agro- based workers in Nigeria, policies aim at periodic increase in worker‟s

salary and reduction in tax rate in line with the changing pattern of macro-economic variables

in the country were advocated. The study was conducted in Calabar Municipality, Odukpani,

and Akamkpa Local Government Areas of Cross River State, Nigeria. The three local

government areas cover the operational areas for most productive rubber estates in the

southern part of Nigeria. Primary data were collected with the aid of a well-structured

questionnaire and interview scheduled. Five rubber estates in the study areas were used for

data collection. Two hundred and fifty (250) workers in the different estates payrolls were

randomly selected from the various operational areas of the agro based firms.

Desai (1983) in his -Research on Rural Savings reviewed that that the existing literature

focuses mainly on the “ability to save”(ATS) and that little attention has been given to the

“incentives to save”(ITS). In part, the lack of analysis on incentives results from the widely

held assumption that rural people do not save, especially in financial form. These

assumptions have resuited in an overemphasis on the improvement of “ability to save” as a

remedy for increasing rural saving rates. They have also led to imbalance in the role assigned

to the Rural Financial Markets for extending loans and for mobilizing voluntary saving. Such

emphasis directly originates from the investment-first approach to conceptualization ofresearch on RFMs. According to this, unlike the flow-of funds approach, technological slack

exists in the rural sector but avenues of investment are not fully utilized due to lack of

finance. It also assumes that there is no scope for “improved” financial intermediation by

promoting transfer of funds from surplus units to deficit ones by financial intermediaries.

Mbat (1985) presented the savings habit of rural households and identifying those factors

which have local effects on their savings behavior in Cross River State. The research sought



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to study the savings behaviour and habit in rural households. It has been discovered

that although the level of rural income tends to be low as compared with that in urban

areas, rural households still have positive savings margin. Their savings behaviour

however depends on how they allocate their income among competing needs but to a

greater extent on the incomes they get from both primary and auxiliary economic

activities. To them savings is imperative since by that they merely prepare for any

rainy day. Their savings habit is however influenced by the absence of nearby banking

facilities. he savings in these areas are therefore not properly utilized and more so it is

not possible to account for them in economic terms. It can therefore be stated that

there is a certain degree of consistency in the savings habit of rural population. This

habit perpetuates the maintenance of a large proportion of money outside the banking

system.

Moulick (2008) in her study Understanding and responding to the savings behavior of poor

people in the North-East of India revealed that saving in the North East Region is practiced

through informal , semi-formal , or formal mechanisms in the form of cash, in-kind, or

account-based savings. The choice is influenced by the economic status of the user. Formal

savings services are inaccessible because of the limited outreach of the formal financial

Institutions. Understandably, the rich are highest users of the formal institutions and the poor

lowest. Semi-formal Institutions such as SHGs and Microfinance Institutions cater more to

the poor and reach out to the lower segment of the not so poor category. Singh (2011)

analyzed that in Manipur, India rural people use both formal finance and Marups which come

under the informal finance for savings. It has been observed that unlike the formal rural

savings and its investment which have several determinants in the state, Marups as an

informal rural savings doesn‟t have any specific determinants. To analyze the determinants of

formal savings above model found that if the occupation of the respondent is Govt. employee,it increases the chance/probability of investing in formal financial institutions. Respondents‟

occupation as agriculture and forestry decrease the probability of investing in formal financial

institution.

National Council of Applied Economics Research (2011) concludes in their report that

Households in villages that are close to urban centers significantly participate in markets,

particularly in the mutual fund market. Participation in mutual funds, in particular, is



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significantly influenced by the level of education. Demographic characteristics of rural

households, like marital status and gender, do not significantly alter the distribution of

investment. There is a significant degree of non-investment by rural households because of:

a) inadequate information, and b) lack of adequate skills. A significantly larger percentage of

rural households across income and asset classes as well as demographics are risk-averse

compared to their urban counterparts. Since rural households are relatively more risk averse,

the time horizon for savers and investor is medium term (3 – 5 years).The level of savings

increases with educational attainment and asset hold-ings. The magnitude increase in savings

conditioned on asset holdings is significantly lower when compared to investments

Wan et.al (2003) presented a paper Saving Behavior in a transition economy in rural China

and attempted to analyze house level data on saving in rural China and estimated a saving

function for rural residents in China.

Various schools of thought with specific rationales, definitions and objectives have sought to

unravel the determinants of financial service usage (Johnson, 2005). New institutional

economics focuses on economic efficiency, collateral, transaction and information costs to

explain debt practices. It views households as opting for informal credit due to a lack of

access to formal sources i.e. credit rationing, or because it enables lower transaction and

information costs, since informal credit procedures are usually quicker and simpler. The

interlinked transactions of informal credit are also considered to make it an efficient way to

access other resources and cope with risk4. On the supply side, neo-institutionalism argues

that the interest rate that lenders charge is determined by the default risk and enforcement

mechanisms.

Guérin et.al (2011) in their article Debt in Rural South India: Fragmentation, Social

Regulation and Discrimination tried to understand rural household borrowing practices by

drawing on a case study from rural southern India. It combines multivariate statistics and

qualitative analysis to study the structure of both formal and informal rural financial markets:

which households access which lenders, under which conditions, and for what purposes?

This paper draws on empirical findings to set out three main arguments. Firstly, informal debt

is not a synonym for unorganized or unstructured debt. Secondly, social regulation results in

persistent inequalities. The most marginalized people have the most financially and socially



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expensive debt sources, and use debt mainly for purposes that do not generate direct income.

Dominant groups, by contrast, enjoy access to the cheapest debt sources and more often use it

for income-generating activities. Thirdly, social regulation does not mean that debt follows a

pre-determined path and is fixed over time. All the social interactions and processes shapes

the debt contract. The results shows that women, like Dalits, have access to the most

expensive debt-sources, socially and/or financially (mobile lenders, pawnbrokers, SHG)

while being excluded from formal finance and that they borrow mainly small amounts to

smooth household cash flow and much less to invest.

Seetha Prabhu et al (1988) examined the substantial decrease in the proportion as well as

absolute number of households reporting debt between 1971 and 1981, at all-India and

state level, from the view- points of (i) underestimation arising out of method of

sampling used for the survey; (ii) steep rise in incomes of the households resulting in

their reduced dependence on external sources of credit; (iii) expansion in network of

institutional credit agencies in rural areas; and (iv) excess demand for credit which was

not met by the institutional credit agencies. Although they have pointed towards the

smaller sample size in 1981 compared to that in 1971, they have agreed that the sample

size per se need not be a contributory factor for decline in the proportion. They added

that the incomes of rural households could not have grown so high as to the reduce

their dependence on credit agencies. Gothoskar (1988) compared the estimates of

outstanding debt of rural households derived from the 1971-72 and 1981-82 surveys with

similar estimates available from the viewpoint of suppliers of credit, such as commercial

and cooperative banks. He observed that the estimates derived from 1981-82 survey (as

also 1971-72 survey) were underestimated and added that the state sample estimates are

generally lower than the central sample estimates for 1981. He referred to both sampling

and non-sampling errors in the derivation of estimates from such large-scale surveys.

From the sampling point of view, he suggested that (i) enquiry into financial

characteristics of households should not be clubbed with other socio- economic enquiries

for the purpose of sample selection; (ii) villages may be grouped into two strata, viz,

villages having institutional credit facilities and villages not having credit facilities; and

(iii) households in selected villages should further be stratified as those availing of loans

from institutional agencies and others. He also suggested that information may also be



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collected from agencies supplying credit in selected villages; and informal loans in the

nature of trade credit and bills payable (current liabilities) may be treated separately

from formal loans.

Satyasai (2002) examined the salient findings of „All India Debt and Investment Survey,

1991‟ and compared with those of earlier surveys. Two important findings of the 1991 survey

are worth mentioning here. First, there is large-scale under-reporting of debt. The survey

found that the estimated outstanding debt, at all-India level, owed to cooperatives and

commercial banks formed a mere 26 percent of the credit reported by these institutions

through various re- turns in 1991, i e, the under-reporting was to the extent of 74 per cent.

The degree of under-reporting has increased compared with 1981, when it was around 64

percent. The 1991 survey reported that 32 percent (after reckoning multiple financing)

of rural households were indebted to one agency or another in 1991. Only 15.6 percent of

the rural households reported debt to institutional sources and 20 per cent to non-

institutional sources. The second, more disturbing finding is that the share of institutional

sources in the outstanding debt of rural households has declined from 61.2 percent in 1981

to 56.6 per cent in 1991 for the country as a whole. Disturbing because, in spite of the

wide- spread network of credit institutions and credit-linked government programmes,

private moneylenders still accounted for over one-third of the cash dues of rural

households in 1991; in fact, their share increased during this period It is often opined

that dependence on private moneylenders is not always undesirable and hence their share

in the indebtedness of households is not of any consequence. This is only partly true.

The fact is that households with low asset base and non-cultivating households are largely

dependent on private agencies. That means the access of such vulnerable sections to

institutional sources needs to be improved.

Rao and Tripathi (2001) examine indebtedness of rural and urban households in terms of their

major characteristics in 1981 and 1991. The important changes introduced in the All-India

Debt and Investment Survey of 1991-92 are reviewed and a comparison of the estimates of

household debt from the survey with those derived from other sources has presented. Their

results shows that debt and investment survey of households, 1991-92, indicated that the



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proportion of households reporting debt has increased during 1981 and 1991 and the rise is

noticed in both rural and urban areas across all states. The inclusion of 'current liabilities'

under debt, in 1991 data, showed that indebtedness had increased during 1981 and

1991 by 12.6 percentage points for rural households (from 19.4 per cent) and 7.6

percentage points for urban households (from 17.2 per cent) as against a marginal

increase indicated by considering only cash debt The decline in the share of institutional

agencies in the total debt of rural households showed that the non-institutional agencies

like moneylenders, traders, relatives and friends, played a dominant role in rural areas but

to a lesser extent in urban areas, even in 1990s. Another important aspect, noted

classification of debt by purpose of loan. Household expenditure and construction of

residential buildings, etc, has not been considered as 'productive expenditure' in survey

reports of 1981 and so 1991, but classified as debt for 'productive purposes' .

Pradhan (2013) discussed the background of All India Debt and Investment Survey both by

the Reserve Bank of India National Sample Survey Organization (NSSO). The discussion on

persistence of informal finance in rural areas, both All-India and State-wise along with credit

agency-wise on the basis of data from various AIDIS Survey rounds is provided , the

informal credit aspects in rural areas from three recent Reports. The key findings from the

above analysis is that informal credit has certainly declined as a percentage of total debt, and

both professional and agricultural moneylenders have reduced their share over time.

Informal/non-institutional finance was gradually declining during the 1960s and was nearly

broken during the 1970s with the institutional agencies venturing into the rural areas with

nationalization of major commercial banks and setting up of regional rural banks with

initiatives of the Reserve Bank. The decline in the share of moneylenders reflects in part the

Government‟s efforts to register and regulate professional moneylenders. At the all India

level, among the institutional credit agencies, the co-operative societies and the commercial banks were the two most important agencies in the rural sector.

Rangarajan and Srivastab(2003) highlighted that Starting with a debt-GDP ratio of about 29

per cent of GDP at market prices in 1950-51 for the central government, by2001-02, the debt

GDP ratio had reached a level of 55.36 percent of GDP, an increase of about 26.5 percentage

points. Nearly half of this increased occurred in the first three plans. Accumulation of central

debt relative to GDP, for an unbroken period of 45 years since 1955-56, has been due entirely



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to cumulated primary deficits relative to GDP with the factor of excess of growth rate over

interest rate mitigating its impact in a significant way .A significant part of the potential build

up of debt due to cumulated primary deficits was absorbed by the excess of real growth rate

over real interest rate as adjusted for the influence of the inflation rate.

Section 3: Research Questions & Objective of the study

1. What is the nature of savings and debt in rural households of Tripura?

2.

Which institutions are more involved in giving saving and debt facility?

3. What socio-economic factors seem responsible for such saving and debt behavior of the

individuals?

4. What are their main income sources?

5. What are sources of debt?

Objectives

. The specific objectives are:-

1.

To identify the saving & debt pattern of rural households of Tripura.

2.

To identify which type of institution are involved in savings & debt practices in

rural Tripura.

Methodology:

Sample Design

The study was conducted with 97 households drawing sample from rural villages of North

Tripura district and West Tripura District. In North Tripura sample was taken from two

villages Bhagyapur and Radhamadhabpur from two separate blocks Kadamtala and Dasda

respectively.

Methods of Data Collection



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The study was based on both primary and secondary data. The secondary data has been

collected from various reports published by Government of India the, Reserve Bank of

India, and the Government of Tripura. The primary data relating to the socio-economic

particulars of selected households and the other data relating to the saving behavior of the

households has been collected by using semi structured interview schedule.

Methods Applied

The present study is mainly descriptive in nature. It mostly relies on the primary data. The

collected primary data has been scrutinized and analyzed to express the socio-economic

features of the respondent households, their income pattern, savings habit and savings

pattern, their requirement for debt, debt habit along with their choice of institution for savings

and that for debt. Primary data has been analyzed and presented through tables, cross- tables

and diagrams. Moreover, standard statistical measures such as mean and standard deviations

have also used to capture the savings and debt generally taken by the households in the study

area.

Data Analysis:

This present chapter analyze the socio-economic characteristics and saving and debt pattern

of rural households of Tripura. The saving and debt pattern of the rural households depends

on the income, occupation, education, family size, land holding, livestock‟s and other

demographic characteristics. The saving and debt habit also depends on availability and easy

access of different financial institutions. Socio-economic and demographic characteristics

have influence on saving rate of the households. Different people save for different needs.

Some for future needs, whereas for some others it is surplus of income on expenditure. Most

of the rural households have very low income for which they have incapable to save more.

Almost 78.35 percent households save but their propensity to save is very low.

Analyses of Primary data

In primary data analysis first the Socio-economic characteristics of the respondent rural

households are analyzed. Second data analysis is concerning the objective of the study i.e.



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Saving and Debt pattern of the Rural Households of Tripura and the financial institutions

which are practicing Saving and Debt.

Educational Status

The education of the head of the household determines the occupation standard of the

households. In general who are belongs to lower income group have lower qualification and who are

belongs to higher income group belongs to higher qualification. The survey data point out that. 45.36

percent households headed by people with education up to upper primary. 27 percent

households have primary education. 16.49 percent passed matriculation, 3.09 percent

illiterate and higher secondary approved and only 4.12 percent are graduates as shown in

table-3.

Table-3: Level of Education of head of the household

Source: Researcher’s Primary Survey Data

Primary Occupation

The occupation of the head of the household is the main sourc of the family from whichsaving is made. The study showed that main occupation of the household consists of business

and non-agriculture or daily wage labours. Around 31.95% are doing business, 25.74% are

engaged in non-agriculture labour, 17.52% are doing service, 12.32% are engaged in

agriculture, 11.34% belongs to others option like driver, electrician (not salaried job),

presenting in chart-3.

Level of Education No of Households Percent of Households

Illiterate 3 3.09

Primary 27 27.83

Upper Primary 44 45.36

Matriculation 16 16.49

Higher Secondary 3 3.09

Graduate 4 4.123



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Chart-3: Percentage of Households of different Occupation

Sourc

e:

Researcher’s Primary Survey Data

Income

The ability to save of a household depends on the income of the household and income is

considered as the most important explanatory variable of the savings of the household. Table-

4 shows that 38.14 percent households have income 7800 annually, 25.77 percent belongs to

119400 annual incomes, 15.46 percent 179940 annual income and 10.30 percent have 45600

annual income.

Table-4: Percentage of households of different income strata

No of Income Earners

Number of earners point out the dependency ratio of a household. Number of income earner

and dependency ratio also plays a chief role to the saving behavior rural household. As in the

Table-5 it shown that 61.85 percent household have only single income earner, 28.86 percent

have two income earners,7.21 percent have three income earners. As it showing that

maximum are single income earners, that indicating less possibility of saving of rural

household.

12.32%

0%

Percen

Income Category(monthly) Percent of households

24000-48000 10.30

60,000-84,000 38.14

96,000-1,20,000 25.77

1,32,000-1,80,000 15.46

1,80,000-above 10.30



19

Table-5: Percentage of No of Income Earners


Type of Family

Most of the rural family belongs to joint family but with a change in family structure now a

day‟s the appearance of nuclear family has covered a way to the savings behaviour of the

households. As a nuclear family the consumption become less and saving is increasing. Our

study shows that 22 percent households are joint families and 78 percent households are

nuclear families as shown in the chart-4.

No of earners Percent of Households

1 61.85

2 28.86

3 7.21

4 1.03

5 1.03



20

Size of the Family

The size of the family is also a vital determinant of the saving behaviour of the rural

households. The large family size leads to a low saving rate as because a large amount of

income spends in consumption purpose. Small family size leads a great propensity towards

saving. In chart-5 we can see that 62.88 per cent family consist of 4 members, 12.37 percent

consist of 12.37 percent, families have 10 members represent 2.06 percent.

Chart-5: Percentage of the Households of different family size

0

10

20

30

40

50

60

70

2 3 4 5 6 7 8 9 10

P

e r c e n t

No. of Family member

Size of the Family



21


Size of Land holding

Land is considered as the biggest asset for the rural household as it can be accumulated in

terms of money and productive asset at the time of financial emergency. From Table-6 we

can see that 54.6 percent have land less than 1kani. 10.30 percent have no land and have

highest size of land holding more than 5 kani.

Table 6: Distribution of Households (in percentage) for Different Land holding

Categories


Livestock’s

Size of Land (Kani) Percent of Households

0 10.30

<1 54.64

1-2 9.27

2-3 8.25

3-4 4.12

4-5 3.09

>5 10.30



22

In rural area livestock‟s are also a source of income and generate some amount of money for

households and it could be a reason for more savings. Sometime people borrow money also

to buy livestock‟s for source of extra income .From Table-6, 23.71 percent have 3-5

livestock‟s, 20.61 percent have 1-2 livestock‟s and 40.23 percent have no livestock‟s.

Table-7: Distribution of Households (in percentage) for Livestock’s

No. Of Livestock’s Percent of Households

1-2 20.61

3-5 23.71

6-8 10.30

9-10 2.06

>10 2.06

None 40.23


Medical Expenditure

Monthly medical expenditure is extra outgoings from the earnings. So if the medical

expenditure is high according to income it reflects on the savings also. In Table-7, 57.73

percent households have less than 500 Rs./ monthly medical expenditure. 30.92 percent from

500-1000, 10.30 percent have 2000-3000.

Table-8: Monthly Medical Expenditure of the Households

Medical Expenditure Percent of Households

<500 57.73

500-1000 30.92

2000-3000 10.30

Above 1.03



23


House Type

House of the households shows the economic condition of the family.Table-9 shows that

51.54 percent households have Kachha house, 41.23 percent have semi-pucca house and only

7.21 percent have pucca house.

Table-9: Percentage of Households for different type of house

Type of House Percent of Households

Kachha 51.54

Semi-pucca 41.23

Pucca 7.21


Saving and Debt Pattern of the Rural Households of Tripura and the

Institutions involve in Saving & Debt practices

During the study it has been found that there are many financial institutions are available who

are providing savings facilities and debt to the rural households in rural Tripura. A number of

financial institutions like State Bank, United Bank, Grameen Bank are available for saving

and debt. Microfinance institutions are also there who are more involving to give loan to the

rural households in Tripura.

Savings done by Individuals



24

The study analyse that 78.35 percent households save regularly. Maximum people save in

Life Insurance, Post Office and chit funds. And most of them have more than one savings.

53.94 percent households are saving in Life Insurance as they think that in Life Insurance

money will be protected and for long period than other institutions. 40.78 percent save in

commercial banks but many of them not maintain regularity of saving in bank and when they

need they just take out and again when they get extra money they deposit it. 28.94 percent

save in Post Office as they think it is older than other schemes with less risk. And around

38.15 percent save in chit fund-Rose valley for high return potential and liquidity. 21 percent

save in SHGs as shown in table-10.

Table-10: Preference of Saving in Financial & Non-financial Institution

Preference of Saving Percent of Households

Commercial Bank 40.78

Post Office 28.94

Insurance 53.94

Chit Fund 38.15

SHG 21


Note-Multiple Responses

Chart-6: Preference of Saving in Financial & Non-financial Institution



25

Type of Saving

Among all who save in bank, LIC, Post Office, Chit Fund and SHGs 5.26 percent save in

fixed deposit, 55.26 percent giving monthly insurance premium. And 59.79 percent save by

giving money 4 times in a year, some give monthly, some of them when they have cash in

hand they deposit it in bank etc given in Table-11.

Table-11: Type of Savings

40.78

28.94

53.94

38.15

21

Commercial Bank Post Office Insurance Chit Fund SHG

Preference of Saving in Financial &

Non-financial InstitutionPercent of Households

Type Percent of Households

Fixed Deposit 5.26

Insurance-Premium 55.26



26



Advantages of the Financial & Non-Financial Institution

From Table-12 we can see that the most important reasons behind save in commercial bank -

14 households said that for professional management, 44 households for flexibility and 20

households for simplicity. At the time of Post-Office most important reasons -9 households

for professional management and low cost, 12 households for flexibility. At the time of

Insurance-14 households for professional management, 22 households for flexibility, 16

households for well regulated and 22 households for simplicity. In Chit Fund maximum are

for simplicity and in SHG for simplicity and flexibility.

Others 76.31



27

Table-12: Advantages of the financial institution



Priority Factor at the time of saving

From Table-13 we can see that 68.42 percent people give priority in safety at the time of

saving. 34.21 percent give priority in high return and others give priority in liquidity and less

risk.

Advantages No. Of Households

Commercial

Bank

Post-Office Insurance Chit-Fund SHG

Professional Management 14 9 14 5 2

Diversification 3 4 4 2

Return Potential 7 2 8 7

Low Cost 5 9 8 6 5Liquidity 3 1 3 2

Transparency 7

Flexibility 44 12 22 12 10

Choice of Schemes 6 5 8

Well Regulated 17 6 16 8

Simplicity 20 7 22 21 10



28

Table-13: Priority Factor at the time of saving

Factor Percent of Households

Safety 68.42

High Return 26.80

Liquidity 34.21

Less Risk 7.89



Information on Saving Scheme

In Table-14 it shows that 59.21 percent households get information about saving scheme

through company agents, 52.63 percent through financial institution, and 17.10 percent from

brokers

Table-14: Source of Information

Source of Information Percent of Households



29

Financial Institutions 52.63

Company Agents 59.21

Brokers 17.10

Magazines 5.26

Leaflet 2.63

Others 2.63



Maturity

Maturity means the mature period of the saving scheme. In table-18, 23.68 percent

households have saving scheme less than 5 year, same for who have 5-10 years saving

scheme. 31.57 percent have 10-15 years saving scheme. And 5.26 have 15-20 years saving

scheme.

Table-15: Maturity Period of the saving scheme

Year Percent of households

< 5 23.68

5-10 23.68

10-15 31.57

15-20 5.26


Loan taken by Households

In this study among 97 households 71.13 percent take loan from different institutional and

non-institutional institution. This has been shown in table-19. Among the household 75.36

percent take loan more than 10,000 at a time.8.69 percent take 5000-7000 and 8.69 percent

take 8000-9000 as shown in the Table-20.



30

Table-16: Loan taken

Borrow Percent of Households

Yes 71.13

No 28.86


Table-17: Amount of Loan taken by the Households

Amount Percent of households

Less than 500 1.44

1000-2000 1.44

3000-5000 4.34

5000-7000 8.69

8000-9000 8.69

10,000-above 75.36


Reason to Borrow

There are many reasons for taking a loan by the household. From Table-18 we can see 40.57

percent take loan in special occasion like- for business, for home purpose, for education, to

invest in other savings etc. 36.23 percent take loan to buy assets, animals.26.08 percent take

loan in emergency, 24.63 percent for home improvements, 11.59 percent for lack of cash in

hand.



31

Table-18: Reasons behind Loan

Reasons Percent of households

For Insufficient Income 1.44

Lack of Cash in Hand 11.59

To buy Assets, Animals 36.23

To pay Losses Made 8.69

In special Occasion 40.57

For Home Improvements 24.63

In Emergency 26.08


Debt Institution

In the study it has been found that there are many financial institutions are presented who are

providing Loan services to the rural households. A number of Institution- Co-operative

societies, Commercial Banks & Regional Banks; Non-Institution- large farmers or money

lenders, indigenous money lenders, traders etc; Microfinance Institutes- SHG, NGOs &

NBFCs are available. From table-22 we can see that 56.52 percent households are borrowing

money from NBFCs-Bandhan. 23.18 percent from SHGs, 20.28 percent from relative/friends,

8.69 percent from Indigenous money lenders and only 11.59 from commercial banks. So it is

clear from this table-19 that people more prefer the micro finance institutes than Commercial

Banks or institutions.

Table-19: Preference of Loan in Different Institutions

Institution Percent of households

Co-operative 1.44

Commercial Bank 11.59

Large Farmers or Money Lenders 1.44



32


Chart-6: Preference of Borrowing money from Financial & Non-financial Institution


Advantages to hold this type of institution for debt

1.44

11.59

1.448.69

20.28 23.18

56.52

Preference of Borrowing money from

Financial Non-Financial Institution

Percent of households

Indigenous Money Lenders 8.69

Relative/friends 20.28

SHG 23.18

NBFCs56.52



33

As we have seen in Table-20 that 40.2 households are using Non-Banking Financial

Institutions for loan purpose. Then why all are using this microfinance institution, 28

households said for flexibility, 26 households consider well regulated, 22 for simplicity and

21 for professional management. In terms SHG, people also consider simplicity, flexibility

and low cost.

Table-20: Advantages of the debt institution

Source: Researcher’s Primary Survey Data Note-Multiple Responses

Selection of Credit Institution

Advantages No. of Households

Co-

operative

Commercia

l Bank

Large

Farmers

or

Money

Lenders

Indigenous

Money

Lenders

Relative/f

riends

SHG NBFCs

Professional

Management

5 6 21

Diversification 2 3 4

Return

Potential

Low Cost 1 3 2 4 11 8

Liquidity5 1

Transparency 1 5 6

Flexibility 1 5 4 6 16 28

Choice of

Schemes

1

Well Regulated 1 5 8 26

Simplicity 1 3 1 5 12 16 22



34

From Table-21 it shows that 56.52 percent select their loan institution by consulting with

company agents, 26.08 percent consulting with debt institutions and 23.18 percent with

consulting villagers.

Table-21: Institute selection for Loan

Source Percent of households

Consulting with debt Institution 26.08

Consulting with company Agents 56.52

Consulting with villagers 23.18


Information Regarding Loan

Survey data explain that 60.86 percent households get information about loan through

company agents, 24.63 percent from others- villagers, relatives etc. And 13.04 percenthouseholds get from different financial institutions.

Table-22: Source of Information Regarding Loan

Source Percent of households

Financial Institution 13.04

Company Agents 60.86

Brokers 1.44

Posters 1.44

Leaflet 1.44

Others 24.63




35

Collateral

71.13 percent households borrow money from banks, relative/friends and micro finance

institutes. Among them only 9.27 percent give collateral for loan.

Table-23: Collateral given at the time of Repayment

Collateral Percent of households

Yes 11.59

No 88.40


Repayment Pattern

The study explain that 56.52 percent give weekly repayment, 30.43 percent monthly and only

11.59 percent give yearly repayment as shown in the Table-24.

Table-24: Repayment pattern of the households

Pattern Percent of households

Weekly 56.52

Monthly 30.43

Yearly 11.59




36

Primary Occupation and saving

In my study the selected households consist of different primary occupational groups

including agriculture labours, non-agriculture or daily wage labours, salaried job, business

persons and others as shown in chart-3.

Table-25: Occupation wise Average Income, Saving and Propensity to Save


Non-agricultural labour or daily wage labour household are the lowest income group among

the different occupation groups and their saving ratio is also lowest. Service households have

the highest income and .06 percent they save from their income. Others like-driver,

contractor, electrician are have highest average propensity to save. Business and agriculture

household also get in close proximity to highest income and saving. Business men also save a

good portion of their income.

Income and Savings

Occupation Groups

Percent of

household

Average Income

(annual)

Average Saving

(annual)

Average

propensityto save

Agriculture 12.32 120000 7330 0.06

Non-agricultural

labour25.74 84000 4350 0.05

Service 17.52 122760 7410 0.06

Business 31.95 122160 7130 0.058

Others 11.34 88320 7220 0.08



37

The capability to save of a household depends on the earnings of the households. As the

income of the household increases, consumption increases and simultaneously saving also

increases. In theory, income is conceived differently by different theories namely, absolute

income, permanent income, relative income and life cycle income. These different concepts

give different explanations for consumption behaviour of households and thus to the saving

behaviour.

Table-26: Average Income and Savings of households of different income strata


Income has a decisive role to play in determining the savings by the households. Here in this

Table-6 it‟s shown that 38.14 percent households have income 7800 annually, 25.77 percent

belongs to 119400 annual income, 15.46 percent 179940 annual income and 10.30 percent

have 45600 annual income. The higher income group save a large portion of their income.60,

000-84,000 income group have highest Average Propensity to save among all income groups.

Education of Head of the household and savings

Income Category

(Annually)

Percent of

households

Average Income

(annually)

Average saving

(annually)

Average

propensity to

save

24000-48000 10.30 45600 1850 0.04

60,000-84,000 38.14 78000 4870 0.06

96,000-1,20,000 25.77 119400 7000 0.058

1,32,000-1,80,000 15.46 179940 7500 0.04

1,80,000-above 10.30 210000 10400 0.05



38

One variable, which has an association with savings of the households, is the educational

status of the households. The higher the level of education of the head of the household, the

stronger is the demand for his services in relation to supply.

Table-9: Level of Education of head of the household and Average Income, Saving


The survey data reveal that with increase of level of education income is also increase, but in

terms of upper primary and matriculation household‟s income is low comparing with others.

In terms of saving income ratio the illiterates and graduates are in higher position. 45.36

percent households headed by people with education up to upper primary. The average

income of these families is 91908, and the average propensity to save is 0.07. 27 percent

households have primary education. The average income of these households is 105240 and

they save 7000 out of this. Only 4.12 percent of households are headed by degree holders,

these households get highest average income 186000 and they save .53 percent of their

income.

Income and Loan

Level of

Education

No

of

household

Percent of

Households

Average

Income

(annually)

Average

saving

(annually)

Average

propensity

to save

Illiterate 3 3.09 84000 4666 0.55

Primary 27 27.83 105240 7000. 0.06

Upper Primary 44 45.36 91908 7093 0.07

Matriculation 16 16.49 93000 7538 0.08

Higher

Secondary

3 3.09 175000 4333 0.02

Graduate 4 4.123 186000 10000 0.53



39

As most of the households do not acquire sufficient money for their expenses, it leads them to

borrow money from an institution. To take Loan is primarily depend on your repayment

capacity. From Table-28 the income category 60,000-84,000 (annually) has highest amount

of Loan. After that 96,000-1, 20,000 in second position with 56%, 1, 32,000- 1, 80,000 in 3rd

position with 46.67%. And the lowest income group has the lowest amount of loan.

Table-28: Distribution of Loan amount of Different Income Category


From Table-28 we can see that in 24000-48000 income group 40 percent have no loan, 30

percent have taken loan more than 10,000. In 60,000-84,000 income group 24.32 percent

have no loan but 64.36 percent have loan more than 10,000.

Income

Category

(annually)

Loan Amount

No Loan <5000 1000-20003000-

5000

5000-

7000

8000-

10,000>10,000 Total

24000-48000 40% 0% 0% 20% 0% 10% 30% 100%

60,000-

84,00024.32 0% 0% 2.70% 5.40% 2.70% 64.86% 100%

96,000-

1,20,00028% 0% 4% 0% 4% 8% 56% 100%

1,32,000-

1,80,00026.66% 6.67% 0% 0% 13.33% 6.67% 46.67% 100%

1,80,000-

above40% 0% 0% 0% 10% 10% 40% 100%



40

No. of Income Earner and saving

If the no of income earner in a family is high compared to dependents then there is a chance

of high saving as the monthly expenditure is less than the income which goes for saving

purpose. And if the dependents become higher than the income earner then the possibility of

saving become low.

Table-27: No of Income Earners and Average Saving


From the Table-27 we can see that 61.85 percent households have single earner and their

Average Saving is less than the households who have three income earners. 28.86 percent

have two income earners but their Average Saving is equal to the single earners.

Section3: Conclusion

In the present chapter we analyze the socio-economic characteristic of the rural respondents

and the saving and debt pattern of the households like the type of savings, amount of saving,

institution of savings, priority factor at the time of saving, loan amount, credit institution,

advantages of the institution, repayment pattern etc. The study found that higher income

groups save higher than the lower income groups. Majority of the households take loan more

than 10,000 and microfinance institutes are more active than the others credit institutions.

No of earners percent Average saving

(annually

1 61.85% 7000

2 28.86% 7000

3 7.21% 10000

4 1.03% 7000

5 1.03% 7000



41

CHAPTER-V

CONCLUSION

Section 1: Summary and Major Findings

As the study progressed on, it was turned such as the collection of numerous observations in

regard with saving and debt pattern. The findings are being mentioned according to the socio-

economic profile and saving and debt pattern of rural households of Tripura these are as

follows.

The total population of this study is 97, among them 48.45 percent head of the belongs to age

group 25 to 45years, 48.45 belongs to 45 to 65 years and only 2.06 percent from 65 and

above. Out of total population 88.66 percent are male headed households and only 11.34

percent are female headed households. The social group wise distribution shows that 37.11

percent from OBC category, 31.95 percent from General category, 27.83 percent belongs to

SC category and rest is ST. In terms educational status 45.36 percent are belongs to upper

primary, 27.83 percent are primarily educated, 16.49 percent did matriculation, 3.09 percent

illiterate and higher secondary passed and only 4.12 percent are graduates. Among all these

households 93.81 percent are married rests are unmarried, widow and separated.

Out of the total population 31.95 percent head of the households engaged in business, 25.74

percent are non-agricultural labour or daily wage labour, 17.52% are doing service, 12.32%

are engaged in agriculture, 11.34% belongs to others option like driver, electrician (not

salaried job). In terms of income, 38.14 percent households have yearly income 78000, 25.77

percent have 119400 yearly incomes, 10.30 percent have 45600 yearly income. 61.85 percent

households have single income earner. 78 percent families are nuclear type of family. 62.88

percent family has 4 family members.54.64 percent have less than one kani land holdings.



42

The survey exposes that 78.35 percent households save regularly in a specific institution.

Maximum households save in Life Insurance Company (53.94%), Commercial Banks like

State Bank, United Bank, Grameen Bank etc (40.78%), Post office (28.94%), Chit Fund

(38.15%) and SHG. And many of them have two or more savings in different institutions by

giving monthly insurance premium and some invest four times in a year or when they have

money on their hand. The financial institutes giving several opportunities to the rural

households as a result they gain a practice to save. The Households save more in LIC for the

reason that their professional management, Flexibility, Well regulated and Simplicity and

same for post office, commercial bank, chit fund and SHG. At the time of saving 68.42

percent households give first priority in Safety and then for liquidity, High return and less

risk. Most of the households get information through Company (saving) Agents (59.21%),

Financial Institutes (52.63%) and from Brokers, villagers also. Majority of the households

(31.57%) have 10-15 years maturity period of their savings.

In this study it reveals that among 97 households 69 households have debt practice. And

maximum take loan more 10,000 at a time around 75.36 percent households. Majority of

households take loan in special occasion (40.57%) like- business, occasion, home

requirements, savings etc; too busy assets, animals (36.23%), for home improvements

(24.63%) and in emergency (26.08%). The households give maximum preference in Non-

Banking Financial Companies (56.52) for borrowing money as their good professional

management, Flexibility, Low Cost, Well Regulated and Simplicity. 23.18 percent save in

SHGs as it is simple, flexible and small amount of money they save regularly which they can

effort. Mass households select their Loan Institution consulting with their Company Agents

(56.52). Among all the households 71.13 percent practice loan but only 9.27 percent of them

give collateral for loan. The Repayment Pattern of 56.52 percent households are weekly.



43

Major Findings

1. When Primary Occupation and saving is compared the results found that the households

who engaged in others occupation like-driver, contractor, and electrician have highest

average propensity to save (0.08) among all occupational group. Service holder

households have highest income but compare to income their savings is low. Business

and agriculture households are also near to the highest.

2. Comparing income and saving the results show that 38.14 percent households have 78000

annual incomes and they save highest among all income groups and 25.77 percent have

119400 annual incomes and .058 percent they save from their income.

3. Education has also associate with savings of the households the graduates have the

highest income but their saving rate is low compare to Matriculation who have highest

saving rate.

4. In terms of loan the data reveal that 64.86 percent of 60,000-84,000 income group have

loan more than 10,000. And in 24000-48000 income category 40 percent have no loan

because low income.

5. The families who have single income earner save less than the family who has three

income earners.



44

Conclusion

The present study found that most of the rural households are subjected to savings but

propensity is low. Most of the households are engaged in small business and non-agriculture

labour thus their income is not so high that they will save a large portion of their income. The

majority of the rural households have low educational status thus their income is low and

which is resulting in less awareness of the people towards benefits of saving. Maximum

family has single income earner, hence a large amount of income goes for family expenses,

as a result the saving rate become low. Some of the family has high monthly medical

expenditure that affecting the saving rate. The increase in the financial institutions like banks,

insurance company, microfinance institutes, SHGs and other local banks provide opportunity

to the rural households of Tripura to save more and to take loan without any collateral. Some

informal financial institutions are doing good job in the field of borrowing money and for

their professional management and simplicity the rural households are too much concerned.

The Government institutions also should take some initiative to attract people in Govt.

institutions and save them from cheating. Some households are there who are cheated once as

a result they are not getting the trust to save again, and not finding a proper and profitable

institute.



45

Policy Recommendation

The study has revealed that the rural households of Tripura have high capacities to save. So

some recommendations are there depending on this study –

1. The saving behavior of the study area is largely determined by income of the household.

So there should be some income generating programmes in rural areas.

2. The average propensity to save of the individuals in the study area is significantly low.

Thus there is need to give sufficient incentives and awareness to the rural households by

educating them.3. There is a tendency of the rural households to opt for instruments offered by the informal

financial institutions. The reason for the preference of informal financial institutions is the

flexibility in their operations. If the formal financial institutions adopt such flexible

operating methods these savings can be channelized for investment in productive sectors.

4. Some Chit funds are there giving saving facility in the rural areas of Tripura and people

are attracting for their profit making schemes and as a result many of them are cheated, so

some initiatives may take by Government to stop this practice and save the innocent rural

people from being cheated.

5.

There must be a proper training for Agents who can advise or counsel these people

regarding proper saving and loan practice.



46

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