Productive Loan and Unproductive Loan.
Distinguish between:
Productive Loan and Unproductive Loan.
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| Productive Loan | Unproductive Loan |
|---|---|
| (i) Loan which is taken for agricultural production purposes is called a productive loan. | (i) Loan which is taken for unproductive purposes is called an unproductive loan. |
| (ii) Eg. purchase of tractor, land or seeds or agricultural equipment, etc. | (ii) Eg. expenditure on marriages or religious ceremonies. |
| (iii) It is an investment. It increases farmers’ income in the future. | (iii) It is an expenditure. It increases the debt burden of the farmers. |
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