Question

Why can borrowing from moneylenders be risky for farmers?

Options

• Moneylenders give loans without interest.

• Such loans are always government-subsidised.

• Only very rich farmers use moneylenders.

• High interest rates and the possibility of falling into a debt trap.

Answer 1

High interest rates and the possibility of falling into a debt trap.

Explanation:

Moneylenders often charge high interest rates, which can make it difficult for farmers to repay and lead them into a debt trap.