i. How many types of loans are there? 

Read the following text and answer the questions that follow.

The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the formal loans, the loans from banks and cooperatives, the informal loans include loans from moneylenders, traders, employers, relatives and friends, etc. You can see the various sources of credit to rural households in India. Out of every 100 rupee credit required by rural families, Rs.25 was available from commercial banks. Besides banks, the other major source of cheap credit in rural areas is the cooperative societies (or co-operatives). There are several types of co-operatives such as farmers’ co-operatives, weavers’ cooperatives, etc. You will also notice moneylenders are an important section of informal credit providers in India.

i. How many types of loans are there? 

A) 4 

B) 3 

C) 2 

D) 5

ii. From where do we get a formal loans? 

A) Banks 

B) Moneylenders 

C) Financial companies 

D) Friends

iii. Who provide informal loans 

A) Moneylenders 

B) Banks 

C) Co-operatives 

D) Friends