Risk Experiences and Management Strategies in Primary Agricultural Credit Societies in Siddharth Nagar District, India

Abstract

Primary Agricultural Credit Societies (PACS) play a crucial role in promoting rural financial inclusion in India; however, they face several risks that affect their sustainability and operational performance. This study examines the risk experiences and management strategies adopted by PACS in Siddharthanagar District, India. Primary data were collected from 60 PACS through a field survey conducted in 2025 using convenience sampling. Descriptive statistical tools, including mean, standard deviation, and ranking techniques, were employed for data analysis. The findings reveal that credit risk (M = 5.73, Rank = 1), operational risk (M = 5.32, Rank = 2), and liquidity risk (M = 4.58, Rank = 3) were the major risks experienced by PACS. External auditing (M = 5.90) and internal auditing (M = 5.70) were identified as the most effective risk identification practices. Portfolio diversification (M = 6.37) and trained staff (M = 6.27) were perceived as important risk mitigation strategies. Findings align with Nepalese and Indian studies on audits and diversification but diverge in undervaluing workshops and technology, possibly due to regional agricultural focus. This research fills gaps in district-specific insights and recommends strengthening governance practices, staff capacity, and climate-adaptive measures to enhance the resilience and sustainability of PACS.