Shyamal is a small farmer. Shyamal has got his 'Kisan Card' made. He needs a loan to grow new crops. Which of the following means will be easy and beneficial for this ?
Generated by claude-sonnet-4-6 · 2026-06-15 06:55 · grounding rag
Model Answer
(A) Cooperative Bank
A Cooperative Bank provides formal credit at low interest rates. Since Shyamal has a Kisan Card, he can easily get cheap loans through a cooperative, avoiding the high interest rates of traders, moneylenders, relatives, or friends.
Source: Money and Credit, Formal Sector Credit in India / Loans from Cooperatives
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Explanation
- Kisan Card is issued to help farmers access formal/institutional credit — making Cooperative Bank the most suitable and beneficial option.
- Agricultural traders (option B) charge high interest (3% per month = 36% p.a.) and force farmers to sell crops at low prices — clearly unfavourable.
- Relatives and friends are informal sources with no guarantee of easy availability.
- The textbook explicitly states that cooperative societies are a major source of cheap credit in rural areas.
- In MCQs like this, always link the clue in the question (Kisan Card → formal credit) to the correct option.