Loans from Cooperatives

Loans from Cooperatives Besides banks, the other major source of cheap credit in rural areas are the cooperative societies (or cooperatives). Members of a cooperative pool their resources for cooperation in certain areas. There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives, industrial workers cooperatives, etc. Krishak Cooperative functions in a village not very far away from Sonpur. It has farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank. These funds are used to provide loans to members. Once these loans are repaid, another round of lending can take place. Krishak Cooperative provides loans for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses. . List the various sources of credit in Sonpur. . Underline the various uses of credit in Sonpur in the above passages. . Compare the terms of credit for the small farmer, the medium farmer and the landless agricultural worker in Sonpur. . Why will Arun have a higher income from cultivation compared to Shyamal? . Can everyone in Sonpur get credit at a cheap rate? Who are the people who can? . Tick the correct answer. (i) Over the years, Rama’s debt · will rise. · will remain constant. · will decline. (ii) Arun is one of the few people in Sonpur to take a bank loan because · other people in the village prefer to borrow from the moneylenders. · banks demand collateral which everyone cannot provide. · interest rate on bank loans is same as the interest rate charged by the traders. . Talk to some people to find out the credit arrangements that exist in your area. Record your conversation. Note the differences in the terms of credit across people.