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Social Science · 2022 · 5 marks
CBSE 2022 · Region 3 · Set 2 · Q10
(a) Explain with an example the role of credit for development. 1 × 5=5
(a)
Explain with an example the role of credit for development. $\displaystyle 1 \times 5=5$
OR
(b)
How are formal sources of credit different from infomal sources ? Explain with example. $\displaystyle 1 \times 5=5$
Marking-scheme solution
(i) Various economic activities can be carried out with the help of credit.
(ii) Cheap and affordable loans give people an opportunity to develop their business.
(iii) Credit plays a very crucial role in agricultural and other activities.
(iv) People can borrow money and use it for modernising agricultural.
(v) Can be used to increase the crop production and grow crops.
(vi) Credit from the banks provide industries with the necessary aid for improvement and development.
(vii) Credit leads to increased production and employment.
(viii) It helps in the development of the country.
(b) How are formal sources of credit different from informal? Explain with example.
Formal sources of credit :
(i) Formal sources of credit are banks and cooperatives.
(ii) The Reserve Bank of India supervises the functioning of formal sources of loans.
(iii) Banks have to submit information to the RBI on how much they are lending, to whom, at what interest rate, etc.
(iv) It charges low interest.
(v) Collateral is must.
(vi) Mostly people from urban area take formal credit.
Informal sources of credit :
(i) Informal loans are given by moneylenders, traders, employers, relatives , friends, etc.
(ii) There is no organisation which supervises the credit activities of lenders in the informal sector.
(iii) They charge high rate of interest.
(iv) Sometimes collateral is asked.
(v) Mainly rural people take informal credit.
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CBSE Class 10 Social Science past-paper question from the 2022 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.