Individual risk propensity and agri-entrepreneurial financing effectiveness: strategy for sustainable agri-financing

The purpose of this paper is to evaluate sustainable effectiveness of agri-financing. An attempt has been made to evaluate individual through risk propensity domains and agri-financing through effectiveness domains. The study identifies prominent predictor of agri-financing effectiveness. The data have been collected through stratified random sampling from 220 beneficiaries who have availed agri-financing in the state of Jammu and Kashmir (India). Structural Equation Modelling approach was employed for instrument developments (i.e. confirmatory factor analysis) and hypothesis testing. It has been found that agri entrepreneurs are risk averse with lower risk propensity in career and finance domains. The results provide evidence that risk propensity dimensions have positive impact on agri-financing effectiveness. The study helps in evaluation, prediction and prevention of probable consequences of agri-financing. The research has significant implications in preventing the economic loss resulted through the failure of agri business schemes. Little research has been conducted on the area of agricultural credit in India which is inevitably revealed from the increasing agri farmer suicides.