Question

In the Colonial period agriculture credit system was dominated by

• A. Commercial Banks
• B. Co-operatives
• C. Indigenous Money Lenders
• D. State owned banks

Hint:

In colonial India, rural credit was dominated by indigenous money lenders because institutional banking was weak and limited.

Answer 1

The Correct Option is C

Concept: Agricultural credit means loans or financial support given to farmers for cultivation, seeds, tools, irrigation, and other agricultural needs.

Step 1: Understand rural credit during colonial period.
During the colonial period, institutional credit facilities were very limited in rural India. Commercial banks and co-operatives did not have wide reach among farmers.

Step 2: Role of indigenous money lenders.
Farmers mostly depended on local money lenders for loans. These money lenders often charged high interest rates and exploited poor farmers. \[ \text{Colonial rural credit} \Rightarrow \text{Dominance of money lenders} \]

Step 3: Eliminating other options.
Commercial banks and state-owned banks were not dominant in rural agricultural credit during the colonial period. Co-operatives existed but had limited reach. Therefore, the correct answer is Indigenous Money Lenders.