MCQs on Rural Credit

Rural credit is a financial tool that provides an opportunity of sustainable livelihood to many rural Indians. It is a form of loan that is taken by farmers or small home-based businesses that are spread across rural areas. The various sources of rural credit are: rural banks, co-operative societies, land development banks, commercial banks, and loans provided by the government. All these rural credit mediums allow farmers to take different credit services, facilities, and loans to meet their production requirements.

Given are some important MCQs on rural credit to analyse your understanding of the topic. The answers are also given for your reference.

Rural Credit: MCQs

Question 1

A small loan amount given to low-income households or groups is known as ________ .

(A) Cash credit

(B) Micro credit

(C) Rural credit

(D) Simple credit

Answer:  B

Question 2

Which microfinance institution is known as the Universal Bank?

(A) Bandhan Financial Services Private Ltd.

(B) Arohan Financial Services Private Ltd.

(C) Disha Microfinance Private Ltd.

(D) SKS Microfinance Private Ltd.

Answer: A

Question 3

The formal sources of credit do not comprise of __________ .

(A) Cooperatives

(B) Employers

(C) Banks

(D) None of the above

Answer: B

Question 4

The informal sector loans incorporate _______ .

(A) State Bank of India

(B) Moneylenders

(C) NABARD

(D) Both (A) and (B)

Answer: B

Question 5

Which option blocks the poor to get bank loans?

(A) Absence of collateral

(B) High rates of interest

(C) Complexity of procedure

(D) None of the above

Answer: A

Question 6

Which of the following takes the decisions regarding loans and savings in a self-help group (SHG)?

(A) Government

(B) Non-government organisation

(C) Bank

(D) Group members

Answer:  D

Question 7

In India, which of the following organisations takes care of the agriculture and rural development credit needs?

(A) IDBI

(B) NABARD

(C) ICAR

(D) FCI

Answer: B

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