Q1. [4]
Loans From Cooperatives
Besides banks, the other major source of cheap credit in rural areas are the cooperative societies (or cooperatives). Members of a cooperative pool their resources for cooperation in certain areas. There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives, industrial workers cooperatives, etc. Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank. These funds are used to provide loans to members. Once these loans are repaid, another round of lending can take place.
Krishak Cooperative provides loans for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses.
Read the given source and answer the questions that follow :
- (36.1) Cooperative societies come under which source of credit ? [1]
- (36.2) Mention any two sources of capital of cooperative societies. [1]
- (36.3) Explain the role of cooperative societies in increasing the income of farmers. [2]
Previously asked in CBSE board exam
2025 32/1/1 Q36
Generated by claude-sonnet-4-6 · 2026-06-15 06:53 · grounding stimulus
Model Answer
(36.1) Cooperative societies come under the formal source of credit.
(36.2) Two sources of capital of cooperative societies:
- Deposits from members
- Loans obtained from banks (using member deposits as collateral)
(36.3) Cooperative societies play an important role in increasing farmers' income in the following ways:
- They provide cheap credit for the purchase of agricultural implements, helping farmers improve productivity.
- They give loans for cultivation and agricultural trade, enabling farmers to invest in their crops.
- They also provide fishery loans and housing loans, reducing dependence on moneylenders who charge high interest rates.
- By offering affordable credit, cooperatives free farmers from debt traps, allowing them to retain more of their income.
Source: Money and Credit, Loans from Cooperatives
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Explanation
- (36.1): Cooperatives are formal sector because they are regulated and follow prescribed lending norms. One word/phrase is enough for 1 mark.
- (36.2): Directly from the passage — member deposits + bank loans. Do not go outside the passage.
- (36.3): For 2 marks, make 2–3 clear points. The key idea is cheap credit → better investment in farming → higher income + freedom from exploitative moneylenders. Examiners look for specific examples (implements, cultivation, trade) drawn from the passage.
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