Ritam Dutta, Senior Data Analyst at the Foundation for Agrarian Studies (FAS), made a presentation on November 5, 2019, at the office of FAS, on different aspects of financial inclusion in two villages of Bihar — Katkuian in West Champaran district and Nayanagar in Samastipur district. Ritam’s study was based on the primary data collected by FAS, as part of the Project on Agrarian Relations in India (PARI), in 2012 and 2018.

Ritam’s analysis showed a high incidence of indebtedness in both the villages. A majority of the credit came from informal sources. The access to formal credit was limited to the rural rich, constituted by the landlords and capitalist farmers. These classes also belonged to the dominant caste group/s of the respective village. Strikingly, the rural rich also received significant amounts of credit from ‘friends and relatives,’ at zero interest rates. The class of manual workers almost completely depended on rich farmers for their credit requirements. An interesting contrast that came out of the presentation was that a majority of the households in both the villages had registered bank accounts, but rarely were there any credit transactions (or any financial transaction for that matter) through them.