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NCERT · Class 10 · Social Science

Chapter 3: Money and Credit

Practice each question, then open the answer or worked solution.

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Textbook exercises

13 questions
Q11Multiple choice

In India, about 80 percent of farmers are small farmers, who need credit for cultivation.

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Correct option: A
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Worked solution

Ans:

a) Farmers, at times they fail to repay the loan amount on time, because of the uncertainty of the crop. Hence, banks may not be willing to lend to small farmers.

b) After banks, the small farmers may borrow money from local money lenders, agricultural traders, cooperatives, big landlords, SHGs etc.

c) The terms of credit can be unfavourable for the small farmer – For example: Ram, a small farmer borrows money from a local moneylender at 3% to grow rice. But unfortunately, the crop is hit by drought and it fails. As a result, Ram has to sell a part of his land to repay the loan. Now, the condition becomes quite worse than before.

d) The small farmers can get a credit at low interest rate from different sources like – Banks, Agricultural Cooperatives, and SHGs.


Q12Written answer

Fill in the blanks:

i) Majority of the credit needs of the _______ households are met from informal sources.

ii) ________ costs of borrowing increase the debt-burden.

iii) ________ issues currency notes on behalf of the Central Government.

iv) Banks charge a higher interest rate on loans than what they offer on _________.

v) ________is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.

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Worked solution

Ans:

(i) poor

(ii) high

(iii) Reserve Bank of India

(iv) deposits

(v) Collateral


Q13Written answer

Choose the most appropriate answer.

(i) In a SHG most of the decisions regarding savings and loan activities are taken by

(a) Bank.

(b) Members.

(c) Non-government organisation.

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Worked solution

Ans:

Option (b) Members.


(ii) Formal sources of credit does not include

(a) Banks.

(b) Cooperatives.

(c) Employers.

Ans:

Option (c) Employers