Roshni is a small farmer who grows cotton on her two acres of land. She approached a bank for loan but the bank did not give her the loan. Give reasons why the bank is not willing to give loan to a small farmer like Roshni. Suggest some ways by which small farmers like Roshni can get loans from banks.
The bank is reluctant to give loan to Roshni because she is poor and therefore she lacks collateral. The lack of collateral is the main reason for which Roshni is being deprived of the facilities provided by the formal sources of credit. Also, Roshni is poor. Therefore, there are high chances that she might not be able to pay the loan at the right time.
Roshni and other small farmers like her can get loans from banks by the following ways :
(i) They can join a self help group or any other farmers' cooperative, where these small farmers can pool their resources and get loan from the banks by using these resources as their collateral.
(ii) They should approach the court or sign a petition if the bank is still not ready to lend them credit.
(iii) They should collectively earn money with their family members so that they can buy some asset, which can act as their collateral.
Roshni and other small farmers like her can get loans from banks by the following ways :
(i) They can join a self help group or any other farmers' cooperative, where these small farmers can pool their resources and get loan from the banks by using these resources as their collateral.
(ii) They should approach the court or sign a petition if the bank is still not ready to lend them credit.
(iii) They should collectively earn money with their family members so that they can buy some asset, which can act as their collateral.