Question: Why Do Farmers Borrow Money From Money Lenders?

What are the two sources of finance for small farmers?

The two major sources of finance in agriculture are institutional and non- institutional sources.

Institutional sources consist of the government and co-operative societies, commercial bank including the Regional bank, Lead bank..

What is agricultural credit?

Agricultural Credit is the amount of investment funds made available for agricultural production from resources outside the farm sector. Agricultural credit is considered as one of the most basic inputs for conducting all agricultural development programmes.

What are the sources of farm financing?

SOURCES OF AGRICULTURAL FINANCECommercial Banks.Microfinance Banks.Cooporatives.Bank of Agriculture.Bank of Industry.Aug 7, 2016

Why do farmers prefer to take loans from the money lenders rather than the banks?

Answer. As the farmers do not have any identity proof and also are not know that banks give loans at low rates of interest.

Why do the small farmers borrow money in Palampur?

Small farmers have small plots of land . They can grow only a less number of crops . Therefore,they donot earn much and donot have their own savings . So they borrow money from big landowners.

Where does the small farmers go to borrow money in Palampur village?

Answer. In Palampur village, the small farmers used to borrow the money from the traders, big farmers or moneylenders to arrange the capital that is used for the cultivation. They need to face a lot of problems but they work on their land to give back the money and stabilize their condition as far as it possible.

What compels the small farmers to borrow money from the large farmers or money lenders?

1 Answer. Small farmers either borrow from large farmers or the village moneylenders or the traders who supply various inputs for cultivation. The rate of interest on such loans is very high which makes it difficult for them to repay.

Who provides capital to the small farmers at high interest rate?

Money lenders and middle (brokers ) give capital to small farmers at high rate of interest .

What are the three sources from where poor farmers get loan?

Answer: Loans to agriculture can be financed by different sources of funds such as farmer household savings, capital markets, equity, budget allocations of the government, central bank refinance facilities and international borrowing.

What is agricultural financing?

“Agricultural Finance” is the study of financial intermediaries who provide loanable funds for agricultural production and that of financial markets in which these intermediaries obtain their loanable funds (Penson and Lins, 1990).

What is the most important source of money lending to farmers in rural areas?

Co-operative Credit Societies- This source of credit is the most economical and important source of rural credit. It was set up with the aim of facilitating the complete credit needs for small and medium farmers.

Why small farmers take money from money lenders?

Small farmers compel to borrow money because : * To Maintain their livelihood. * As they need money, they buy fertilizers and seeds.

What is the main source of loan for small farmers?

Rich farmers and banks. Moneylenders and Banks. Banks and their own savings. Rich farmers and moneylenders.

How do small farmers accumulate debt?

Small farmers have no capital and have to arrange for capital by taking loans from large famers on a very high interest rate. In addition, the banks do not provide them with loans because they lack proper documents and collaterals such as house, livestock or nay other property to guarantee to obtain a loan.

How can I get a farmers loan?

Documents Required to Apply for Loan Against Agricultural LandDuly-filled application form.One valid identity proof like your PAN Card, Aadhaar Card, or Passport.One valid proof of residence like Aadhaar Card, Passport, or Utility Bills.Land documents like registration document, taxes paid, and utility bills.More items…

Why do you think small farmers depend on big farmers?

Answer. 1) Small farmers have to depend on big farmers for money as the sometime work in their field. 2) They also depend on big farmers for loans. 3) They depend on big farmers for their livelihood.

What is the source of capital for the large farmers?

The main source of capital for the medium and the large farmers is by selling the surplus sale in the markets and earn good profits. They also have savings which they can use in the season and again save and use that savings in the next season.

Why do farmers need to borrow money?

SMALL FARMERS BORROW MONEY IN PALAMPUR BECAUSE THEY HAVE TO PAY THEIR MONTHLY DUE TO THEIR LANDOWNERS , THEY ALSO HAVE TO PAY FOR THE MAINTAINANCE OF THE FIELD AND TAXES ALSO BOTH FOR THE CROPS AND LAND,THUS THEY HAVE TO BORROW MONEY.

Why did small farmers borrow money state 3 reasons?

small farmer have to arrange capital by borrowing are as follows: 1) they also have to raise production for future. 2) also,their earnings are low. 3)they have small fields which only fulfills his familys basic needs and they are left with nothing to sell in market.

Which bank is best for farmers?

State Bank of India (SBI)State Bank of India (SBI) is the pioneer and market leader in Agri financing. It has a vast network of 16,000 branches all over India, which covers more than 1.01 crore farmers.

Who is eligible for Kisan card?

The applicants must be able to pool out a production credit of Rs. 5,000 or more to become eligible for the KCC. The KCC can be availed of for crop production, non-farm activities or other allied undertakings. To avail of Kisan Credit Card, the farmers must prove their identity and address.