Arrange the following stages in the history of rural credit in India…

Arrange the following stages in the history of rural credit in India in the correct order:

(A) Self-Help Groups emerge to fill the gap in the formal credit system
(B) Moneylenders and traders exploit small farmers through high interest rates and manipulated accounts
(C) India adopts social banking and a multi-agency approach to rural credit
(D) NABARD is set up as an apex body to coordinate rural financing institutions

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (B), (C), (D), (A)

Rural credit moved from moneylenders to banks and then to small groups of the poor.

(B) Moneylenders and traders exploit small farmers through high interest rates and manipulated accounts — this was the position at the time of independence.

(C) India adopts social banking and a multi-agency approach to rural credit — the major change came after 1969.

(D) NABARD is set up as an apex body to coordinate rural financing institutions — this came later, in 1982.

(A) Self-Help Groups emerge to fill the gap in the formal credit system — SHGs emerged recently, because formal credit did not reach the poor.

NCERT (2026-27): “5.3 Credit and Marketing in Rural Areas … At the time of independence, moneylenders and traders exploited small and marginal farmers and landless labourers by lending to them on high interest rates and by manipulating the accounts to keep them in a debt-trap. A major change occurred after 1969 when India adopted social banking and multi-agency approach to adequately meet the needs of rural credit. … National Bank for Agriculture and Rural Development (NABARD) was set up in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system. … Recently, Self-Help Groups (henceforth SHGs) have emerged to fill the gap in the formal credit system because the formal credit delivery mechanism has not only proven inadequate but has also not been fully integrated into the overall rural social and community development. …”