One of the main reasons for the backwardness of agriculture in this district is the incapacity of the agriculturists to finance the agricultural production by himself. Under ordinary circum-stances it was a common practice for him to borrow funds from the village sahukar or money-lender and satisfy his needs. But the rates of interest charged by the money-lender were very high. His system of recovery of loans was also exacting. The only other alternative for him, therefore, was to get financial assistance from the Government. The Government used to advance loans to the needy cultivators under two Acts, the Land Improvement Loans Act and the Agriculturists' Loans Act. As a rule applicants were very eager to take these loans from the Government although in a few remote parts, a little persuation was needed to induce aboriginal tenants to do so. The joint responsibility system which was usually enforced at any rate for agricultural loans was not, however, very popular, but was submitted to as a necessary condition for obtaining the amount.

The Land Improvement Loans Act was passed in 1883. Under this Act loans are granted to cultivators for carrying out works of improvement on land such as construction of wells and tanks, preparation of land for irrigation, drainage, reclamation or protection of it from erosion. The old Gazetteer of Chanda states, " of recent years a fair number of these loans have been taken under the grant-in-aid system. It is comparatively rare to find money taken ostensibly for one of these purposes misapplied, but horn time to time cases occur in which the borrower diverts the loan to such uses as paying off his debts or to a marriage ceremony."[Chanda District Gazetteer, 1909, pp. 199-200.]

Loan transactions were very small during the periods when there were no famines: during the famines they were naturally very heavy and subsequently they have been generally on a larger-scale. Altogether from 1874 to 1905, 3.42 lakhs of rupees were advanced under the Land Improvement Loans Act.

The Agriculturists' Loans Act was passed in 1884. Under this Act loans were granted to holders of arable lands for (a) purchase of seed, fodder. cattle, agricultural stock and implements, (b) rebuilding houses destroyed by fire, flood or due to any other calamity. (c) maintaining cultivators while engaged in sowing or tilling their lands till they get the harvests of the next crop, and (d) any other purposes not specified in the Land Improvement Loans Act. 1883, connected with agriculture. Under this Act the total amount advanced from 1885 to 1905 amounted to Rs. 5.20 lakhs out of which 4.02 lakhs were recovered and Rs. 79.500 were remitted.

The allotment and disbursement of tagai loans considerably increased after the beginning of the Five Year Plans.