Why do banks hesitate to lend to small farmers, and what are the alternative sources of credit for them?
Banks hesitate due to high interest rates; alternative sources include moneylenders and informal credit sources
Banks prefer lending to small farmers; no alternative sources available
Banks offer low-interest rates to small farmers; no alternative sources needed
Banks do not lend to small farmers; no alternative sources available
Answer and Solution
Answer
A. Banks hesitate due to high interest rates; alternative sources include moneylenders and informal credit sources
Solution:
Banks may hesitate to lend to small farmers due to high interest rates, perceived risks, lack of collateral, and administrative constraints. In such cases, small farmers may resort to alternative sources of credit like moneylenders, self-help groups, cooperatives, or government schemes to meet their financial needs.
Watch Video Solution