Structure and Financial Performance of Primary Agricultural Credit Cooperative Societies in Mizoram

Abstract

Agriculture is one of the most important sectors in the country, as more than 55 percent of the total workforce in India is engaged in this sector. Since the formulation of the Indian Cooperative Societies Act in 1912, the cooperative sector has played a major role in delivering credit to the masses. One of the main players in the Rural Short-Term Cooperative Credit System (RSTCC) in the country, as well as in Mizoram, is the Primary Agricultural Credit Cooperative Societies (PACS). The paper examines the structure and financial performance of 25 sample PACS using certain parameters like villages covered, membership, employment generation, working capital, total business, capital structure, CD ratio, debt-equity ratio, return on investment, etc. To draw inferences, statistical tools such as CAGR, t-value of curve estimation, ratios, and Pearson Correlation were used. While the village coverage is low, the membership base has increased significantly. The sample PACS were able to utilize their membership base to increase their share capital. However, the credit-deposit ratio and capital structure of the sample PACS do not have a significant relationship with the return on investment.