Many small rural operations cannot obtain financing within their own communities because:

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19-10-2018
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Many small rural operations cannot obtain financing within their own communities because:

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andriansp andriansp · Answer 1 · 2018-10-28T10:55:17+01:00

The answer is: small rural banks lack the necessary financial expertise to counter the risks involved with small-business loans.

The profit from providing loan is taken by the bank from the percentage of total loan that being given.

Small-business loans tend to be unfavorable because the percentage of return from the loan is not big enough to sustain the risk. Because of this situation, only financial institution with large capitals tend to only want to provide loans to small business.