What are the various ways through which farmers can get loan? Write th

1.	What are the various ways through which farmers can get loan? Write their advantages and disadvantages.
Answer» Farmers can get loans through the following ways: (i) Large farmers or village moneylenders: Most of the small farmers prefer taking loans from large farmers or village moneylenders. Advantages of taking loans from such sources are: (a) They are flexible in terms and conditions of repayment and rate of interest. (b) They know the lenders personally so get loans without collateral security. Disadvantages: (a) Rate of interest is very high. (b) Small farmers are exploited and are trapped in vicious circle of poverty. (ii) Banks and cooperative societies: Although, very few numbers of small farmers approach banks for loan but they provide them better services. Advantages of loans from banks and cooperatives: (a) No exploitation of farmers. (b) Uniform and nominal rate of interest for all. Disadvantages: (a) Needs proper security and have set terms and conditions.

What are the various ways through which farmers can get loan? Write their advantages and disadvantages.

Answer»

Farmers can get loans through the following ways:

(i) Large farmers or village moneylenders: Most of the small farmers prefer taking loans from large farmers or village moneylenders.

Advantages of taking loans from such sources are:

(a) They are flexible in terms and conditions of repayment and rate of interest.

(b) They know the lenders personally so get loans without collateral security.

Disadvantages:

(a) Rate of interest is very high.

(b) Small farmers are exploited and are trapped in vicious circle of poverty.

(ii) Banks and cooperative societies: Although, very few numbers of small farmers approach banks for loan but they provide them better services.

Advantages of loans from banks and cooperatives:

(a) No exploitation of farmers.

(b) Uniform and nominal rate of interest for all.

Disadvantages:

(a) Needs proper security and have set terms and conditions.