credit is useful as well as harmful, it depends on the risk involved support the statement with examples.
Answers
1. Credit is a working capital which is required for production. The credit helps the farmers to meet the ongoing expenses of production, complete production on time, and thereby increase his earnings. Credit therefore plays a vital and positive role in this situation.
2. The failure of crop may push the borrower into a situation from which recovery is very painful. In many cases farmers need to sell part of land to repay the loan.
3. Whether the credit would be useful or not depends on the risks in the situation and whether there is some support in case of loss.
Hope it helps you !
Credit is an agreement in which the lender provides money to borrower in promise of future payment.
In swapna's case credit was harmful as her crop failed and she could not repay it. So she was caught in debt trap.
In Salon's case credit helped him gain profit and he could expand business
So risks involved in credit depends on what you borrow it for and if it is successful.