Question : Statement 1: Institutional sources of credit offer flexible repayment schedules to accommodate farmers' cash flows.
Statement 2: Institutional sources of credit require farmers to provide collateral for loan approval.
Option 1: Both statement 1 and statement 2 are true.
Option 2: Both statement 1 and statement 2 are false.
Option 3: Statement 1 is true, but statement 2 is false.
Option 4: Statement 1 is false, but statement 2 is true.
Correct Answer: Statement 1 is true, but statement 2 is false.
Solution : I apologize for the confusion. Let me correct my previous response.
The correct answer is (c) Statement 1 is true, but statement 2 is false.
Institutional sources of credit do offer flexible repayment schedules to accommodate farmers' cash flows. They understand the seasonal nature of agriculture and may provide repayment options that align with the farmers' income patterns.
However, not all institutional sources of credit require collateral for loan approval. Some institutions may require collateral, while others may offer loans based on the farmers' creditworthiness, repayment history, or other factors. The requirement for collateral can vary depending on the specific institution and the type and size of the loan being sought. Therefore, statement 2 is not universally true for all institutional sources of credit.
