Question

A1) Ram is a small farmer. He has to borrow money to arrange for the capital. He borrow
from a trader who lives in a village. What kind of loan is it?​

Answer 1

Answer:

Small farmers borrow money for cultivation from money lenders.

They borrow money from money lenders because they don't have any form of security (collateral) as requested by the formal sources of credit.

Small farmers often get exploited with higher interest from money lenders.