Rural Credit MCQs
Rural Credit – MCQs with Answers & Explanations
Class: 11 |
Subject: Economics |
Section: Rural Development |
Topic: Rural Credit |
Board: CBSE
These Multiple Choice Questions (MCQs) are designed strictly as per the NCERT syllabus, making them ideal for CBSE Class 11 Board Examinations. Each question includes detailed explanations for concept clarity.
1. Rural credit refers to:
Answer: B
Rural credit includes loans taken by farmers and rural households for agriculture, consumption, and productive activities.
2. The main need for rural credit arises due to:
Answer: A
Farm income is seasonal, while expenses are continuous, creating demand for credit.
3. Institutional sources of rural credit include:
Answer: C
Institutional sources are organized and regulated, such as banks and cooperatives.
4. Non‑institutional sources include:
Answer: C
Moneylenders are informal lenders charging high interest.
5. The biggest drawback of non‑institutional credit is:
Answer: B
They often charge exorbitant interest and exploit farmers.
6. Cooperative credit societies provide:
Answer: B
They are farmer‑focused institutions.
7. Regional Rural Banks aim to:
Answer: B
RRBs expand banking in rural areas.
8. NABARD stands for:
Answer: A
It apex body for rural credit.
9. Short‑term credit is used for:
Answer: A
It covers seasonal inputs.
10. Long‑term credit finances:
Answer: B
It supports capital investments.
11. Kisan Credit Card provides:
Answer: B
It offers flexible crop credit.
12. Institutional credit is preferred because:
Answer: B
It ensures transparency and lower rates.
13. Crop failure leads to:
Answer: B
Farmers struggle to repay loans.
14. SHGs supplement rural credit by:
Answer: B
They provide microloans.
15. Indebtedness means:
Answer: B
Excessive debt traps farmers.
16. Rural banks improve:
Answer: A
They expand access to finance.
17. Collateral is:
Answer: A
Assets pledged against loans.
18. Crop loans are usually:
Answer: C
They finance seasonal farming needs.
19. Formal credit reduces:
Answer: B
It replaces usurious lending.
20. Rural credit supports:
Answer: A
Credit enables investment and productivity.