Definition
PACS stands for Primary Agricultural Credit Society. It is a basic unit and first contact point in the rural credit delivery system in India. PACS provides short and medium-term loans to its members, mainly small farmers and agricultural laborers.
Key Takeaways
- Full Form of PACS stands for Primary Agricultural Credit Societies. They are basic units and foundational components in the structure of cooperative financial institutions in India. This can be the first takeaway.
- PACS provide loans to its member farmers for agricultural and allied activities, acting as a critical key in the Indian rural credit structure aimed to provide suitable, timely finance to farmers. This can be regarded as the second important takeaway.
- In addition, PACS also provide essential banking services like deposits and withdrawals to the rural population which otherwise have limited access to formal banking facilities. They thus play a significant role in the financial inclusion process in rural areas, marking it as the third critical takeaway.
Importance
PACS stands for Primary Agricultural Credit Society. It is important in the realm of finance because it plays a crucial role in promoting financial inclusion especially in rural areas.
PACS function at the grassroots level of the cooperative credit system, providing short and medium-term credit to its members. It capitalizes on local knowledge to assess creditworthiness, thus minimizing the risk of default.
PACS also mobilizes rural savings and facilitates agricultural and related activities, acting as the primary interface between individual farmers and the formal banking sector. Therefore, understanding the full form of PACS and its operations is crucial for anyone interested in rural finance or agricultural economics.
Explanation
PACS, which stands for Primary Agricultural Credit Society, is a basic unit and first contact point for farmers in the co-operative credit structure in many places, particularly in India. The main purpose of PACS is to provide a method for farmers and individuals engaged in agriculture to access affordable credit options.
This system is essential for supporting the portion of the population involved in agriculture, giving them better opportunity to grow their farms and businesses. The loans and credit from PACS are primarily used for purchasing agricultural inputs such as seeds, fertilizers, and various tools as well as for financing the working capital for agriculture and farming related activities.
PACS may also offer some basic banking services in rural areas, including savings accounts. This grassroots-level institution plays a crucial role in empowering rural communities, reducing poverty and contributing to rural development and economic growth.
Examples of Full Form of PACS
The term “PACS” in the finance world usually refers to “Primary Agricultural Credit Society.” Here are three real world examples:
In India, Primary Agricultural Credit Societies (PACS) have pivotal importance in the rural financial system. For instance, Karnataka Vikas Grameena Bank works in collaboration with PACS to disburse agricultural loans to farmers. The bank provides the necessary funds, while the PACS handle the process of loan distribution and repayment.
Similarly, in Odisha, India, the government created an initiative called the “PACS as MSC” (Multi-Service Centre) scheme, where PACS are used to deliver a variety of services like issuing Kisan Credit Cards, loans, insurance, and even non-financial products, making them a significant point of financial connection in rural areas.
In West Bengal, PACS have been computerized under the initiative of “Computerization of Primary Agricultural Credit Societies (PACS) – A Central Sector Scheme.” This aims to improve operational efficiency and transparency in PACS functions, enabling them to provide banking services to all farmer members.
FAQs about PACS (Primary Agricultural Credit Society)
What is the full form of PACS?
The full form of PACS is Primary Agricultural Credit Society.
What is the function of PACS?
PACS is designed to provide credit facilities to small farmers and other not so well off rural sector workers, who are unable to take advantage of credit facilities from commercial banks due to the lack of security and other impediments.
How does PACS work?
PACS operates at the village level and it works as a cooperative where farmers come together to loan and deposit money. They offer short and medium term loans and also involved in non-credit activities like sale of inputs (Seeds, fertilizers, etc).
Why is PACS important?
PACS plays an important role in promoting inclusive growth by providing financial services to people in rural areas. This society has the potential to change the financial landscape of rural India by widening the access to credit and other financial products.
How to become a member of PACS?
To become a member of a PACS, one must contribute towards its share capital and agree to use the services of the society. The byelaws of the society will detail the admission process, rights, liabilities, etc., of the members.
Related Entrepreneurship Terms
Sure, here you go:
- Central Cooperative Bank
- Microfinance
- Rural Credit Structure
- Cooperative Movement
- Short Term Credit
Sources for More Information
Sure, here are four reliable sources for more information about the full form of PACS (Primary Agricultural Credit Society):
