Question

‘’Raman is a small farmer. He borrows money from the village moneylender to buy

agricultural inputs. Most farmers like Raman still depend on informal sector for credit.’’ Give

reasons for this prevailing situation.​

Answer 1

Explanation:

There are many reasons, one of them is literacy. Because many farmers like raman are illiterate, they dont know about the norms and procedure for applying loans in bank. They think that borrowing money from bank may put them in bankrupt, they also think it as a long procedure for borrowing loan from bank. So for this reason they depend on informal sectors.