MCQs on Rural Credit

Rural credit is a financial tool that provides an opportunity of sustainable livelihood for many rural Indians. It is any form of loan that is taken by the farmers or small home based business that are spread across rural areas.  The various sources of rural credit are: rural banks, co-operative societies, land development bank, commercial banks and loan 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 below are important MCQs on rural credit to analyze 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 household or group 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


D) (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

In a self-help group (SHG), the loan and saving decisions are generally taken by

A) Government

B) Non-government organisation

C) Bank

D) Group members

Answer:  D

Question 7

In India, which of the following organizations take care of the agriculture and rural development credits needs?





Answer: B

Stay tuned to BYJU’S for more MCQ’s on Economics, question papers, sample papers, syllabus and Commerce notifications.

Leave a Comment

Your email address will not be published. Required fields are marked *