Question : Assertion: Institutional sources of credit provide financial assistance to small and marginal farmers.
Reason: They have specific schemes and provisions to cater to the credit needs of these farmers.
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 financial assistance to small and marginal farmers, and the reason for this is that they have specific schemes and provisions to cater to the credit needs of these farmers.
Small and marginal farmers often face challenges in accessing credit from traditional financial institutions due to factors such as lack of collateral, limited credit history, and lower income levels. Institutional sources of credit, such as government-supported financial institutions or microfinance institutions, recognize the importance of providing financial assistance to these farmers.
These institutions have specific schemes and provisions designed to address the credit needs of small and marginal farmers. They offer loans with flexible repayment terms, lower interest rates, and simplified documentation requirements. They may also provide technical assistance and training to help farmers improve their productivity and income-generating activities.
By offering financial assistance tailored to the specific needs and constraints of small and marginal farmers, institutional sources of credit contribute to improving their access to finance and enabling them to invest in agricultural activities, purchase inputs, and improve their livelihoods.
Therefore, the assertion that institutional sources of credit provide financial assistance to small and marginal farmers is true, and the reason that they have specific schemes and provisions to cater to the credit needs of these farmers is the correct explanation for this assertion.
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