Question

State the categories of farmers’ loan on the basis of period.

Answer 1

Introduction

In modern farming, credit has become one of the crucial inputs. The co-operative credit societies was, in the past and even now, the most important source of credit to the farmers. Since 1969, commercial banks are also financing agriculture because of `social control'. There has been tremendous increase in the bank branches in the rural areas, Govt. has adopted the policy of `multi-agency approach' in agricultural credit,. At present, primary agricultural co-operative societies, land development banks, commercial banks and regional rural banks are financing agriculture. National Bank for Agriculture and Rural Development (NABARD) is providing refinance to the commercial banks. In order to reduce the competition amongst the commercial banks in the rural areas, a policy of "Service Area Approach" has been adopted since 1988. As per this policy, each bank has to adopt few villages and they are required to meet credit.

Answer 2

Answer:

1. Short-Term Loan:

In this category loan is given for a period of less than 15 months to meet the current needs example  for  fertilizers, seeds, wages, domestic purposes etc.

2. Medium-Term Loan:

Duration of medium term loan is between 15 months to 5 years and is given for the digging of wells,  purchase of cattle land-maintenance, purchase of agricultural equipment also for marriage and  community death dinner.

3. Long-Term Loan:

Duration of this category of loan is more than ve years. Such loan is given to repay old loans to  purchase land, for permanent reforms in land, to purchase tractor and other heavy machinery to  install pump sets etc