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?

Tick the correct answer.

(i) Over the years, Rama’s debt

1. will rise.
2. will remain constant.
3. will decline.

(ii) Arun is one of the few people in Sonpur to take a bank loan because

1. other people in the village prefer to borrow from the moneylenders.
2. banks demand collateral which everyone cannot provide.
3. 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.