Question:

Rural Development
There is a greater need today to make rural areas more vibrant through diversification into dairying, poultry, fisheries, vegetables and fruits and linking up the rural production centres with the urban and foreign markets to realise higher returns on the investments in the products. Moreover, infrastructure elements like credit and marketing, farmer-friendly agricultural policies and a constant appraisal and dialogue between farmers' groups and state agricultural departments are essential to realise the full potential of the sector.

Today we cannot look at the environment and rural development as two distinct subjects. There is need to invent or procure alternate sets of eco-friendly technologies that lead to sustainable development in different circumstances such as organic farming. From these, each rural community can choose whatever will suit its purpose. We need to learn from, and also try out when found relevant, practices from the available set of 'best practice' illustrations to speed up this process of 'learning by doing'. A good example of such practice is creating a group and channelling their savings through micro credit whcih functions like mini banks for the development of agriculture.

Farm Women's Groups (FWG) under Tamil Nadu Women in Agriculture (TANWA) project, are creating savings in their group by functioning like mini banks through a system called____

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The passage says savings channelled through micro credit work like mini banks.
Updated On: Oct 1, 2026
  • Rural Banking.
  • Micro Credit.
  • Community Investment Support Fund.
  • Regional Rural Bank's
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The Correct Option is B

Solution and Explanation

Step 1: Understand the question
The question asks for the name of the system by which farm women's groups save money together and work like mini banks.

Step 2: Use the passage
The last line of the passage says a good example is creating a group and channelling their savings through micro credit, which functions like mini banks for the development of agriculture.

Step 3: Recall the idea
Micro credit means giving very small loans from pooled savings, often to women and poor farmers, who may not get loans from regular banks. Self-help groups use this system.

Step 4: Check option 1
Rural banking is a broad term for banking in villages, run by institutions. It is not a group savings system. Option 1 is WRONG.

Step 5: Check option 2
Micro credit matches the passage. Option 2 is CORRECT.

Step 6: Check option 3
Community Investment Support Fund is a fund for community projects, not the name of the savings system. Option 3 is WRONG.

Step 7: Check option 4
Regional Rural Banks are formal banks set up by law. A women's group acting like a mini bank is not an RRB. Option 4 is WRONG.

Final Answer:
The system is micro credit. This is option 2. \[ \boxed{\text{2. Micro Credit}} \]
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