Question

Why do farmers often have to borrow money from moneylenders or brokers? Select the most suitable option(s).

• A. Sometimes, banks refuse to give them loans.
• B. They need it to buy seeds, fertilizers and pesticides.
• C. They need it to pay for their children's education.
• D. They need it to buy a house.

Answer 1

Answer: (A), (B)

The correct options are
A Sometimes, banks refuse to give them loans.
B They need it to buy seeds, fertilizers and pesticides.

Farmers need to borrow money to buy inputs like seeds, fertilizers and pesticides. Sometimes, banks do not lend money to farmers because they fear that they cannot repay the principle amount in periodic interests since agriculture is a seasonal business and the income is not fixed.