Rural Finance Concepts

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Questions and Answers

What is the relationship between finance and financial systems in the context of rural finance?

  • Finance and financial systems are highly related concepts, with the latter being crucial for managing acquired finance (correct)
  • Acquisition of finance is sufficient for business objectives, regardless of financial systems
  • Financial systems are only relevant for large-scale farming businesses
  • Finance and financial systems are mutually exclusive concepts

What is the primary goal of rural finance in terms of financial services?

  • To focus solely on financing agricultural-related activities
  • To provide only credit and insurance services to rural individuals and households
  • To cater only to small-scale farmers and modern farming businesses
  • To provide a range of financial services, including savings, credit, payments, and insurance, on a sustainable basis (correct)

What has contributed to the increase in agricultural production, according to the text?

  • Technological revolution, including mechanization and improved varieties (correct)
  • Improvement in financial services for rural individuals and households
  • Increased focus on microfinance for poor and low-income people
  • Development of new financial institutions and markets

What is the primary focus of agricultural finance, as a subset of rural finance?

<p>Financing agricultural-related activities, such as input supply and production (C)</p> Signup and view all the answers

What is the definition of finance in the context of rural finance?

<p>Capital in monetary form, lent or borrowed, for capital purposes (A)</p> Signup and view all the answers

What is a key financial challenge in rural finance?

<p>Concentration of activities (B)</p> Signup and view all the answers

What is one of the key functions of financial systems?

<p>Producing information about possible investments (D)</p> Signup and view all the answers

What is a cultural challenge in rural finance?

<p>Repayment culture (C)</p> Signup and view all the answers

What is a weather challenge in rural finance?

<p>All of the above (D)</p> Signup and view all the answers

Why must rural credit markets be liberalized?

<p>To support productivity growth for agricultural small holders and small producers of the rural non-formal sector (A)</p> Signup and view all the answers

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