Cooperatives use pooled resources as ____ for obtaining loans from banks.

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Cooperatives use pooled resources as collateral for obtaining loans from banks.
Cooperatives follow a specific procedure to get a massive loan from a bank. They collect the deposit of their members, and these pooled resources are used as collateral to obtain loans from a bank. The big loan is further divided into smaller loans amongst its members to buy agricultural inputs, construction of houses, and other expenses. Once the loan is repaid, the cooperatives might take another loan depending upon the loan requirement of the members. The small loans with reasonable interest rates allow the farmers to buy agricultural inputs and other expenses. Cooperatives are arranged explicitly into farmers' cooperatives, weavers' cooperatives, etc.

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