Question : Assertion: Institutional sources of credit provide credit counseling and guidance to farmers.
Reason: They have trained personnel who assist farmers in understanding loan requirements and repayment procedures.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer:
Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Institutional sources of credit do provide credit counseling and guidance to farmers, and the reason for this is that they have trained personnel who assist farmers in understanding loan requirements and repayment procedures.When farmers approach institutional sources of credit for loans, they often encounter trained personnel who are knowledgeable about the loan products and services offered. These personnel play a crucial role in guiding and counseling farmers throughout the loan application and repayment process.
Credit counseling involves providing farmers with information and guidance regarding the various loan options available, their eligibility criteria, interest rates, repayment terms, and other relevant aspects. The personnel help farmers understand the loan requirements, including the documentation needed and the procedures involved in applying for and obtaining the loan.
The guidance and counseling provided by institutional sources of credit are important for promoting responsible borrowing, enhancing financial literacy among farmers, and reducing the risks associated with taking loans. It helps farmers understand the terms and conditions of the loans, their repayment obligations, and the potential consequences of default.
Therefore, the assertion that institutional sources of credit provide credit counseling and guidance to farmers is true, and the reason that they have trained personnel who assist farmers in understanding loan requirements and repayment procedures is the correct explanation for this assertion.
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