Question 1.
Farmers usually take crop loans at the beginning of the season and repay the loan after:
(a) Sowing
(b) Tilling
(c) Harvesting
(d) All the above

Answer
Answer: (c) Harvesting
After harvesting.

Question 2.
Credit sometimes, pushes the borrower to a situation from which recovery is:
(а) Easy
(b) Hard
(c) Very painful
(d) None of the above

Answer
Answer: (c) Very painful
To a condition which is very painful.

Question 3.
Sometimes lenders demand against loan:
(a) Payment
(b) Cheque
(c) Draft
(d) Collateral

Answer
Answer: (d) Collateral
Collateral is the security which lenders demand against loans.

Question 4.
Interest rate, security and documentation requirement, and the mode of repayment together comprise what is called the:
(a) Loan factor
(b) Credit factor
(c) Terms of loan
(d) Terms of credit

Answer
Answer: (d) Terms of credit
All are terms of credit.

Question 5.
Loans from banks and cooperatives are called:
(a) Mixed loans
(b) Term loans
(c) Formal loans
(d) Informal loan

Answer
Answer: (c) Formal loans
They are called formal loans.

Question 6.
Loans from moneylenders, traders, employers, relatives and friends are called:
(а) Mixed loans
(b) Term loans
(c) Formal loans
(d) Informal loans

Answer
Answer: (d) Informal loans
They are called informal loans.

Question 7.
The RBI monitors the banks are actually maintaining:
(а) Cash books
(b) Cash balance
(c) Cash register
(d) None of the above

Answer
Answer: (b) Cash balance
The RBI monitors the banks are actually maintaining cash balance.

Question 8.
Most of the informal lenders charge:
(a) A less interest on loans
(b) A much higher interest on loans
(c) Can be both (a) and (b)
(d) None of the above

Answer
Answer: (b) A much higher interest on loans
Most of the informal lenders charge a much higher interest on loans.

Question 9.
The rich households are availing cheap credit from formal lenders whereas the poor households:
(a) Do not get a loan
(b) Get loan at a much less interest
(c) Have to pay a heavy price for borrowing
(d) None of the above

Answer
Answer: (c) Have to pay a heavy price for borrowing
The poor households do not have papers and thus, have to pay a heavy price for borrowing.

Question 10.
Cheap and affordable credit is crucial for:
(а) The development of urban areas
(b) The development of rural areas
(c) The country’s development
(d) All the above

Answer
Answer: (c) The country’s development
For the country’s development.

Question 11.
About 85 percent of the loans taken by poor households in the urban areas are from:
(a) Formal sources
(b) Informal sources
(c) Mixed sources
(d) None of the above

Answer
Answer: (b) Informal sources
Are from informal sources, because they do not have the required documents.

Question 12.
Most loans from informal lenders carry a very high interest rate and do little to:
(a) Do anything for the poor
(b) Pay the loans
(c) Increase the income of the borrowers
(d) None of the above

Answer
Answer: (c) Increase the income of the borrowers
Loans from informal lenders do a little to increase the income of the borrowers because their rates are high.

Question 13.
It is important that the formal credit is distributed more equally so that:
(a) The rich can benefit from the cheaper loans
(b) The poor can benefit from the cheaper loans
(c) The women can benefit from the cheaper loans
(d) None of the above

Answer
Answer: (b) The poor can benefit from the cheaper loans
So that the poor people can benefit from the cheaper loans.

Question 14.
The full form of SHG is:
(а) Station House Guard
(b) State Housing Guarantee
(c) Self Happy Groups
(d) Self Help Groups

Answer
Answer: (d) Self Help Groups
It is Self Help Groups.

Question 15.
The SHGs help borrowers overcome the problem of:
(а) Lack of funds
(b) Lack of money
(c) Lack of collateral
(d) None of the above

Answer
Answer: (c) Lack of collateral
The SHGs help borrowers overcome the problem of lack of collateral.

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