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Q.

Small farmers usually borrow money from :

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a

Traders

b

Large farmers

c

Village moneylenders

d

All of the above

answer is D.

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Detailed Solution

Small farmers usually borrow money from traders, large farmers, and village moneylenders. Most small farmers rely on these informal sources of credit as they do not have collateral security to get credit from formal sources of credit, like commercial banks and cooperatives. However, these are easy sources of credit for them. Traders, large farmers, and money lenders are often in a better financial position than small farmers. They lend money by charging exorbitant rates of interest to small farmers. Often, small farmers get exploited by moneylenders and traders and get into debt traps.

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