Question

explain loans from cooperatives?​

Answer 1

Answer:

Loans from Cooperatives

 Besides banks, the other major source of cheap credit in rural areas is the cooperative societies (or cooperatives). Members of a cooperative pool their resources for cooperation in certain areas. There are several types of cooperatives, namely:- Farmers cooperatives Weavers cooperatives Industrial workers cooperative Let us take the example of Krishak Cooperative. Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. The Cooperative accepts deposits from its members. Using the deposit as collateral, the Cooperative obtains a large loan from the bank. The loan amount received from the bank is used as funds to provide loans to the members. Once the members repay the loans the amount is repaid to the bank and a fresh loan is taken from the bank. The Cooperative provides loans to its members for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses.

Answer 2

Loans from cooperatives:

• Cooperatives are non-profit credit-related organizations formed by various groups of people.
• Based on the interests of the members, these can be of various types. Industrial workers cooperatives, farmers cooperatives, and weaver cooperatives are some examples.
• The cooperatives pool their surplus funds, which are then used as collateral to obtain loans from a bank.
• This loan amount is used to further lend to the members of the cooperative.
• A fresh loan is taken again by using the pooled funds as collateral.
• Members take loans for a variety of purposes such as buying agricultural implements and loans for constructing houses.
• The interest on these loans is low, and the terms of credit are lenient.
• Therefore, loans from cooperatives help in the development of rural economies.