Besides banks, the other formal major source of cheap credit in rural areas, are :
the cooperative societies
Rural Credit Sources: Banks and Alternatives
In rural areas, accessing credit (loans) is essential for various activities like farming, small businesses, and household needs. Credit sources are broadly categorized into formal and informal sectors. Formal sources include institutions regulated by the government, like banks and cooperative societies. Informal sources include money lenders, friends, relatives, and traders, who often operate outside government regulation.
The question asks for a major source of cheap credit in rural areas, specifically a formal source besides banks. Banks are a primary formal source, but the question seeks another significant one.
Analyzing Rural Credit Options
Let's examine the given options:
- Money lenders: While often a common source in rural areas, money lenders typically belong to the informal credit sector. They often charge very high interest rates, making their credit neither 'cheap' nor always formally regulated.
- Zamindars: Historically, zamindars (landlords) sometimes provided loans, but this was generally an informal arrangement and not necessarily characterized by cheap credit or widespread availability as a primary formal institution.
- The cooperative societies: These are formal organizations formed by people coming together to help each other. In rural areas, agricultural cooperative societies are very common. They pool savings and resources to provide loans to their members at reasonable or cheap interest rates. They are a significant formal channel for credit alongside banks.
- Friends and relatives: This is a source of credit within the informal sector. While the interest rate might be low or non-existent (making it 'cheap'), it's not considered a formal or major institutional source of credit for the broader rural economy.
Key Takeaway on Formal Rural Credit
Considering the criteria of being a formal, major, and cheap source of credit in rural areas, cooperative societies stand out as the most fitting answer besides banks. They provide structured financial services and aim to offer credit at accessible rates to their members, playing a vital role in the rural financial system.
Important Questions from Business organizations
Which one of the following is NOT a market-oriented definition of a business?
Arrange in the sequence, steps in the procedure for calling a statutory meeting of the company
A. Contents of the statutory report
B. A list of members must be produced at the commencement
C. Twenty-one days notice
D. Certification of the statutory report by not less than two directors, one of whom must be the managing director
E. A certified copy of the statutory report must be delivered to the Registrar
Choose the correct answer from the options given below
Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R
Assertion A: Two companies with the same general earning power and same general position in an industry, the one paying larger dividend will almost always sell at a higher price
Reason R: The discounted value of near dividends is higher than the present worth of distant dividends
In light of the above statements, choose the most appropriate answer from the options given below
Which of the following statements are false? Indicate the correct code.
(A) No company has to file any prescribed declaration before commencement of business.
(B) A company can ratify the contract entered into by the promoters with third parties on behalf of the company before its formation.
(C) The date mentioned in the certificate for commencement of business is taken as the date of birth of a public company.
(D) A private company has to file a "Settlement in lieu of prospectus" with the registrar.
Choose the correct answer from the options given below:
Arrange the following stages of formation of companies in a proper sequence:
(A) Promotion stage
(B) Raising of share capital stage
(C) Incorporation stage
(D) Commencement stage
(E) Selection of name
Choose the correct answer from the options given below:
