The study analyzed the constraints faced by the farmers to rural
credit by utilizing two household level data sets. The first survey
Pakistan Rural Household Survey (PRHS) 2001 was utilized to study
the purpose, source structure and utilization of rural credit and;
the second which covered nearly 160 households from Sargodha
District 2007 was used to calculate the demand and interest rate
function by applying Heckman two stage procedures. The focus of
this study was to find out the affect of credit constraints of
institutional credit on consumption and production pattern of the
rural farm households. After measuring the probability of being
constrained used to study affect on consumption pattern of farmers
who were credit constraint. The frontier production function was
used to study the affect of credit constrained and un-constrained
farmers. The study will help to make the policy makers to make a
well structured policy for the credit-constrained farmers. This
will ultimately used as an instrument to reduce the poverty in
Pakistan. We are highly obliged and indebted to Dr. Sohail J. Malik
for his kindness, willing cooperation, support, and assistance
throughout this work.
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