In India's rural areas, agriculture is the major source of revenue. Farmers and peasants must invest a significant amount of money each year to secure a decent crop. Their fundamental requirements must be met before harvest season, when they may make money from selling their crops, thus they frequently borrow money from banks and other financial organizations.
As a result, any loan obtained in India's rural areas for agricultural activities or small home enterprises is referred to as a Rural Credit.
Sources of Rural Credit
- Land Development Banks
- Co-operative Credit Societies
- Regional Rural Banks
- Commercial Banks
Types of Rural Credits
- Short-term loan/credit: A short-term loan or credit is a type of rural credit that is used to meet a temporary private or commercial capital need. It is a form of credit that calls for the repayment of the borrowed principal amount as well as the interest percentage on or before a specified date at the end of a period that can last for as long as a year at most.
- Medium-term loan/credit: A medium-term loan is one with a repayment period of two to five years, but not more than ten years. Medium-term loans are a great alternative for small businesses searching for a traditional way of credit with predetermined repayment terms and amounts.
- Long-term loan/credit: Long-term loans typically have a repayment period of 5 to 20 years, with certain exceptions. Long-term financing is necessary for any firm to generate long-term assets that will pay off in the future.
Following are some of the multiple choice questions on the Rural Credit with answers that will help the students in developing their knowledge.
Rural Credit MCQ
1. What is the main difference between a village and a hamlet?
2. By March end 2003, more than __ SHGs had reportedly been credit linked.
3. The problem faced in rural banking are
4. Which one of the following is not an non- institutional source of credit?
5. During 2007-12, agriculture output has grown at__.
6. What were the earliest form of objects used as money in India?
7. Credit taken for a period of 15 years is known as
8. Which one of the following is the important characteristic of modern form of currency?
9. Which of the following is not true regarding the in convenience of Barter Exchange?
10. Most of small farmers borrow money from -
11. Which of the following is not an advantage of self-help group?
12. State whether true or false•• Collection forest produce and diary provide additional income to villagers.
13. Central government organisation, who are involved in agricultural marketing
14. Imagine you are a member of a fishing family and you are discussing whether to take a loan from the bank for an engine. What would you say?
15. Since money acts as an intermediate in the exchange process, it is called _______
16. When both parties agree to sell and buy each others commodities it is known as:
17. What kind of loans do members of SHG take?
18. People also have the provision to withdraw the money as and when they require the deposits in the bank accounts to be withdrawn, what are these deposits called?
19. _________costs of borrowing increase the debt-burden?
20. Which is one of the major reasons which prevent the poor from getting bank loans?
21. In rural areas, the main demand for credit is for _________
22. Which one of the following is the main source of credit for the rich households?
23. Terms of credit are with respect to :
24. Banks use the major portion of the deposit to:
25. Which one of the following is a major reason that prevents the poor from getting loans from the banks?
26. Credit or loan refers to an agreement between:
27. Rate of interest charged by moneylenders as compared to that charged by banks is:
29. Which body (authority) supervises the functioning of formal sources of loans?
30. Many farmers are suffering from debts because of
31. In which months farming is done ?
32. What type of farmers hire other farmers to work in their farms ?
33. Where does Ramalingam take loan for his rice mill?
34. State whether true or false•• Collecting forest produce and diary provide additional income to villagers.
35. Where do the majority of people who live in rural areas come from?
36. Which of the following are factors that would stop people from living in an area?
37. Which of the following are factors that would draw people to live in a certain area?
38. Which of the following are examples of how rural settlements can be shaped?
43. Which of the following is an example of a linear settlement pattern?
44. Rural settlements can be found in which country/ies?
45. Indian agriculture contribution to the national gross domestic product (GDP) is about ---------- per cent.
46. India is an agricultural country and -------- population depends on the agricultural sector directly or indirectly
47. The ‘Golden Revolution’ was a period of very high productivity in:
48. Short term credit is needed for
49. A regulated market has many controls over the farmers.
50. The scheme of "Micro Finance" is extended through:
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