What are the advantages of having a farmers‟ bank compared with an ordinary commercial bank in the provision of services to farmers?

CPA-Financial-Management-Section-3 Revision kit

Advantages of having a farmer‟s bank:
– No need for a collateral in securing a loan. Only a guarantor may be required.
– Fewer formalities in borrowing of loans.
– Minimum deposits will be low according to the savings ability of farmers.
– Other standing charges such as ledger fees withdrawal and deposit fees etc will be eliminated.
– It would meet the unique finance needs of the farmers including giving advise on how to invest the money borrowed.
– Lower cost of borrowing compared to the punitive interest rate charged by banks.

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