Consider the following information
Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank.
(a) List the various sources of credit in Sonpur.
(b) Compare the terms of credit for the small farmer, the medium farmer and the landless agricultural worker in Sonpur.
© Can everyone in Sonpur get credit at a cheap rate? Who are the people who can?
(a) Various sources of credit in village Sonpur are
(i) Village moneylender
(ii) Traders
(iii)Landowner as moneylender
(iv)Commercial banks
(v) Krishak cooperative society
(b) (i) Terms of credit for small former
■ High rate of interest.
■ Promise to sell crops to traders at low prices as repayment of loan.
(ii) Terms of credit for medium former.
■ They can take loans from banks or from cooperatives who charge very low rate of interest.
■ Loan can be paid back in the next three years.
(iii) Landless agricultural workers in Sonpur
■ Borrower has no means to repay the loan in cash. So, he pledges to repay loans by working for the landowner.
■ Rate of interest is high.
© Everyone cannot get credit at a cheap rate. Only the following people are able to get it
(i) Who have some collateral.
(ii) Who have organised themselves into cooperative society.
(iii) Who can fulfil the bank’s documentation requirements.