Case Study Questions for Class 10 Social Science Economics Chapter 3 Money and Credit

Question 1:

In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organise rural poor, in particular women, into small Self Help Groups (SHGs) and pool (collect) their savings. A typical SHG has 15-20 members, usually belonging to one neighbourhood, who meet and save regularly. Saving per member varies from25 to 100 or more depending on the ability of the people to save. Members can take small loans from the group itself to meet their needs. The group charges interest on these loans but this is still less than what the moneylender charges. After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank. Loan is sanctioned in the name; of the group and is meant to create self-employment opportunities for the members. For instance, small loans are provided to the members for releasing mortgaged land, for meeting working capital needs (e.g. buying seeds, fertilisers, raw materials like bamboo and cloth), for housing materials, for acquiring assets like sewing machine, handlooms, cattle, etc.

(i) Fill in the blanks from the given options:
In Self Help Groups, …….. decide the savings and loan activity option.
(a) Reserve Bank of India
(b) Members
(c) Co-operatives
(d) Rural Banks

Ans. (b) In Self Help Groups, group members decide the savings and loan activity options.

(ii) 85% of the loans taken by the poor households in the rural areas are from which of the following sources?
Identify the source from the given options.
(a) Cooperatives
(b) Government Bank
(c) Informal Sources
(d) Local bank

Ans. (c) 85% of loans taken by the poor households in rural areas are from informal sources.

(iii) Which of the following aspect is correct regarding the Self Help Groups? Identify the correct option.
(a) They have mainly encouraged rural women to obtain credit.
(b) They have helped women to become self-reliant.
(c) They have helped women to discuss on relevant issues like health.
(d) All of the above

Ans. (d) All the given statements are correct.

(iv) Why Self Help Groups (SHG) are growing in popularity? With reference to the above context, infer the appropriate option.
(a) As they provide loans at a nominal rate of interest.
(b) They create self-employment opportunities for its members.
(c) Both (a) and (b)
(d) As members of SHG’s require collateral to get loans.

Ans. (c) Self Help Groups are growing in popularity as they provide loans as at nominal rate of interest and they create
self-employment opportunities for its members.

(v) Assertion (A): Members can take small loans from the group itself to meet their needs through Self-Help Groups.
Reason (R): SHGs are the building blocks of organisation of the rural poor.
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true, but R is not the correct explanation of A
(c) A is true, but R is false
(d) A is false, but R is true

Ans. (b) Members can take small loans from the group itself to meet their needs as the group charges interest on these loans but this is still less than what the moneylender charges. On the other hand, Self Help Groups are generally considered the building blocks of organisation of the rural poor. Hence, both assertion and reason are true but reason is not the correct explanation of assertion.

(vi) Which is one of the major reasons that prevent the poor from getting bank loans? Choose the best suitable option:
(a) Absence of collateral
(b) Lack of availability of banks in rural areas
(c) Lack of approach towards formal organisations.
(d) All of the above

Ans. (a) Absence of collateral is the major reason which prevent poor from getting bank loans.

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