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) How do 'Krishak Cooperatives' secure funds for providing loans to their members ? [1]
- (36.2) What are the different types of loans that 'Krishak Cooperatives' offer to their members ? [1]
- (36.3) Why are such cooperatives desirable in the rural areas ? [2]
Previously asked in CBSE board exam
2024 32/5/1 Q36
Generated by claude-sonnet-4-6 · 2026-06-15 06:53 · grounding stimulus
Model Answer
(36.1) Krishak Cooperative accepts deposits from its members and uses these deposits as collateral to obtain a large loan from the bank. These funds are then used to provide loans to members.
(36.2) Krishak Cooperative offers loans for:
- Purchase of agricultural implements
- Cultivation and agricultural trade
- Fishery loans
- Construction of houses and other various expenses
(36.3) Cooperatives are desirable in rural areas because they provide cheap credit to farmers and rural people, reducing their dependence on moneylenders who charge high interest rates. Members pool their resources, making credit accessible to those who lack individual collateral. This helps break the cycle of debt and supports rural development and self-reliance.
Source: Chapter – Money and Credit, Section – Loans from Cooperatives
---
Explanation
- (36.1) The passage directly states the two-step process: member deposits → used as collateral → bank loan. Mention both steps.
- (36.2) Simply list the four types from the passage. No elaboration needed for 1 mark.
- (36.3) For 2 marks, examiners expect two clear points: (i) cheap/affordable credit, and (ii) reduced dependence on informal/exploitative sources like moneylenders. Linking it to pooling of resources shows understanding of the cooperative model.
If a question refers to an image, map, graph or diagram that is not shown here, open the Study Guide single page app, go to
Library and find the actual CBSE question paper. The original papers are also available on the CBSE website:
cbse.gov.in.