Question

Which exploitative practices were traditionally associated with moneylenders in rural credit?

Options

• Fixing government-approved minimum prices for crops

• Providing free insurance to all borrowers

• Refusing to lend to any farmer under any circumstance

• Charging high interest rates and manipulating farmers' accounts

Answer 1

Traditionally, moneylenders provided credit but exploited farmers through high interest rates and manipulation of accounts, trapping borrowers in debt. This exploitation created the need for formal, institutional rural credit.