WHY THERE IS LACK OF MONETARY SUPPORT TO THE POOR FARMERS BY THE MONEY LENDERS
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hey!!
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the growth and deepening of agriculture finance markets is constrained by a variety of factors which include:-
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i) inadequate or ineffective policies.
ii) high transaction costs to reach remote rural populations.
iii) covariance of production market and price risks.
iv) absence of adequate instruments to manage risks.
v) low levels of demand due to fragmentation and incipient development of value chains.
vi) lack of expertise of financial institutions in managing agricultural loan portfolios.
hope help u!!
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Monetary support to poor farmers is not given by the money lenders as the interest charged by this informal lending institution is very high and poor farmers are unable to repay the debt.
Explanation:
- Moneylenders grant money to the framers who are in need of very high-interest rates.
- Poor farmers, however, are not able to pay such high-interest rates. Additionally, if they are granted money then due to natural crop failure or other reasons they are unable to repay the debt.
- In this way, they get trapped in the cycle of debt as they ask more money for repaying previous debt.
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