Question 14 - Teachoo Sample Paper - Social Science Class 10 - Paper 2 - Solutions to CBSE Sample Paper - Social Science Class 10 - Social Science Class 10

Which of the following is an example of a formal source of credit in India?

1. Moneylenders

2. Cooperatives

3. Relatives

4. Traders

Answer:

Answer by Student

So, the correct answer is (B): Cooperatives

Detailed Explanation by Teachoo

-lock-

Let’s check all the options

• Option (A) Moneylenders - Moneylenders are not formal sources of credit, but informal sources of credit. They are individuals who lend money to people at a very high interest rate and without any collateral or documents. They often exploit the borrowers and trap them in debt. So, this is incorrect.

.

• Option (B) Cooperatives - Cooperatives are formal sources of credit, as they are registered and supervised by the government. They are associations of people who have common interests and needs. They provide loans to their members at a low interest rate and with minimal collateral or documents. They also promote the welfare and development of their members. So, this is correct.

.

• Option (C) Relatives - Relatives are not formal sources of credit, but informal sources of credit. They are people who are related to the borrower by blood or marriage. They may lend money to the borrower without any interest or collateral or documents. They may also expect some favour or help in return. So, this is incorrect.

.

• Option (D) Traders - Traders are not formal sources of credit, but informal sources of credit. They are people who sell goods or services to the borrower on credit. They may charge a higher price or interest for the goods or services they provide on credit. They may also have some influence or control over the borrower’s business. So, this is incorrect .

Thus, option (B) is correct .

-endlock-