Social Science (087) — AI-generated practice question

Farming households borrow at the start of the crop season and can only repay after harvest — a gap of 3–4 months. During this period, if the crop fails (due to pests, drought, etc.), repayment becomes impossible. The farmer must then take a fresh loan, with interest accumulating on the old one, pushing them into a debt trap (as seen in Swapna's case).

A small manufacturer like Salim, however, repays the loan as soon as an order is fulfilled. The repayment cycle is short and not dependent on uncertain natural factors. If one order is delayed, the next can cover costs. There is no long waiting period with compounding interest, so the risk of falling into a debt trap is much lower.

Source: Chapter 3 — Two Different Credit Situations; Swapna's Problem

---

• Examiners look for two clear contrasts: the long, uncertain repayment cycle of farmers vs. the short, predictable cycle of manufacturers.
• Mention crop failure risk and compounding debt for farmers — these are the key reasons for vulnerability.
• Refer to Swapna's example to show you've read the textbook case.
• Avoid writing more than needed — 3 marks = ~3 distinct points made clearly.