Question:medium

In one of the small villages, a farmer borrows money from the village moneylender at a high monthly interest rate but is not able to repay it back. Next, he borrows it from a bank at a lower interest rate. Gradually he earns and pays back the loan to the moneylender and the bank. Which of the following best describes the role of the bank in this credit situation?

Updated On: Jan 13, 2026
  • The bank acts as a cooperative lender
  • The bank facilitates a debt-trap situation
  • The bank ensures a fair exchange of goods
  • The bank saves the farmer from debt-trap
Show Solution

The Correct Option is D

Solution and Explanation

Banks are vital for offering affordable credit, enabling farmers to settle debts and avoid exploitative moneylender interest rates.
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