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Social Science · 2025 · 5 marks
CBSE 2025 · Region 4 · Set 2 · Q33
Analyse the role of credit in rural economy.Analyse the differences between formal and informal sectors of credit.
Analyse the role of credit in rural economy.
Analyse the differences between formal and informal sectors of credit.
Marking-scheme solution
| |p{$\displaystyle 0.47$\linewidth}|} (i) Important for economic growth and development of rural economy. | |
| (ii) Encourages farmers to invest in non-agricultural activities. | |
| (iii) Supports the farmer to modernize agricultural practices. | |
| (iv) Increases production of agricultural output. | |
| (v) Helps to manage ongoing expenses. | |
| (vi) Can put a farmer in a debt trap. |
OR
(B) Analyse the differences between formal and informal sectors of
credit.
E
Formal Sources of Credit
Informal Sources of credit
The Reserve Bank of India
No one supervises their
supervises their functioning.
functioning.
In urban areas, it is the main
In rural areas, it is the main source
source of credit.
of credit.
Collateral is required.
There is no need of collateral.
Cost of borrowing is low.
Cost of borrowing is high.
The process of lending is long and
Credit is easily available.
complicated.
Do not use unfair means to get
Use unfair means to get their
their money back.
money back.
Example: Banks, Cooperatives,
Example: Moneylenders, friends,
etc.
family, relatives, agricultural
traders, etc.
(Case Based/Source-based Questions)
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CBSE Class 10 Social Science past-paper question from the 2025board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.