Can everyone in Sonpur get credit at a cheap rate? Who are the people who can?
No, everyone in Sonpur cannot get credit at a cheap rate. Cheap credit is accessible only to certain people who can meet specific requirements.
People who can get cheap credit include those who can provide collateral to banks. For example, Arun, who owns seven acres of land, receives a bank loan at only 8.5 per cent per annum. Additionally, members of cooperative societies can access cheap credit, as cooperatives are described as a major source of cheap credit in rural areas.
However, landless agricultural workers like Rama cannot get cheap credit. She has to borrow from her employer at 5 per cent per month (60% per year), which is very expensive. Banks demand collateral which everyone cannot provide, leaving many villagers dependent on costly informal sources.
Explanation
The textbook clearly shows the contrast between different borrowers in Sonpur. Arun gets cheap credit from banks at 8.5% per annum because he can provide collateral (his land). Cooperatives are explicitly mentioned as 'the other major source of cheap credit.' However, Rama and other landless workers cannot access these cheap sources because they lack collateral, forcing them to borrow from landowners at exorbitant rates (5% per month = 60% per annum).