Question

Why do small farmers in Venkatapuram find it difficult to get a loan from the bank ?

• A. They do not own land for farming.
• B. They are not eligible for a loan.
• C. Banks are sceptical of farmers repayment capacities.
• D. They do not have modern equipments for farming.

Answer 1

The correct option is C Banks are sceptical of farmers repayment capacities.

Banks are reluctant to grant loans to small farmers as they are prone to crop failures. They question the ability of farmers to repay their loans in the event of a crop failure.