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Variety of Credit Arrangements Example of a Village Rohit and Ranjan had finished reading about the terms of credit in class. They were eager to know the various credit arrangements that existed in their area: who were the people who provided credit? Who were the borrowers? What were the terms of credit? They decided to talk to some people in their village. Read what they record... e rs and 15th Nov,2 019. he felds w here m ost f rm e fel s W e he ad directly for t at this ti e of the day. Th sm all lbou rrs w oul be w orkig s.We fist m eet Shyam al,a arep lnted w ih pota tocrop ted vil ge. rmer inS onpur,a sm alliriga fa W e next meet Arun who is supervising the S hyamal tells us that every season he needs work of one farm labourer. Arun has seven acres of land. He is one of the few persons loansforcultivationonhis1.5acresofland.Till in Sonpur to receive bank loan for a few years back, he would borrow money from cultivation. The interest rate on the loan the village moneylender at an interest rate of is 8.5 per cent per annum, and can be repaid five per cent per month (60% per annum). anytime in the next three years. Arun plans For the last few years, Shyamal has been to repay the loan after harvest by selling a borrowing from an agricultural trader in the part of the crop. He then intends to store village at an interest rate of three per cent the rest of the potatoes in a cold storage per month. At the beginning of the cropping and apply for a fresh loan from the bank season,thetradersuppliesthefarminputson against the cold storage receipt. The bank credit, which is to be repaid when the crops offers this facility to farmers who have are ready for harvest. taken crop loan from them. Besides the interest charge on the loan, the trader also makes the farmers promise to Ra ma is workingin a neghbo urig fied. She sell the crop to him. This way the trader wo rks as an agriculurallabourer. Thre are can ensure that the money is repaid several mon ths in he year when Ram a has promptly. Also, since the crop prices are low no work, and needs credt to mee t te da after the harvest, the trader is able to expenses. Expenses on sudden ilnes ily make a profit from buying the crop at a low functins inthe fam ilare also met thes or price from the farmers and then selling it lons. Rama has to depend on he rough later when the price has risen. a medium lando wne rin Sonp r employer, The ladown er charges a ur,for credt. 5 p er cent per mon n interest rate of mon ey by working foth. Ram a repays th e of the ime, Ram r the landowner.Mos t before the p a has to take a resh loan, At pre revious loan has be en repaid. Rs 5,00sen t, she o wes the lando wne r trea 0. Thou gh the ando wne r doesn ’t t hr well, e continues to work fr him since she ca n get lans from him when in need . Rma tellsus that theonly source of credit fr the ladless people in onpu r ar the landown er-employers. e Reprint 2026-27