FINANCING RURAL NON FARM SECTOR
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Rural Banking (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the Rural Non-Farm Sector (RNFS) and why is it significant for rural development?
RNFS refers to all economic activities in rural areas other than agriculture, such as manufacturing, trade, and services. It is significant because it diversifies rural income, reduces dependence on agriculture, and provides employment to surplus agricultural labour.
What percentage of India's rural workforce is engaged in non-farm activities?
Approximately 25-30% of rural workforce is non-farm.
Which categories of activities are included under the Rural Non-Farm Sector?
RNFS includes agro-processing industries, handicrafts, cottage industries, rural trade and commerce, transport, construction, and rural services like repair shops and small manufacturing units.
What is the minimum loan amount under MUDRA's Tarun category for non-farm enterprises?
Tarun category covers loans from Rs 5 lakh to Rs 10 lakh.
How does RBI define priority sector lending with respect to rural non-farm activities?
RBI's Priority Sector Lending (PSL) guidelines include small and micro enterprises, agro-processing units, and other rural non-farm activities under priority sector, with specific sub-targets ensuring credit flow to these segments.
Which government ministry oversees the Pradhan Mantri MUDRA Yojana scheme?
Ministry of Finance oversees MUDRA Yojana.
What is the role of NABARD in financing the Rural Non-Farm Sector?
NABARD provides refinance to banks for lending to rural non-farm activities, promotes micro-enterprises through SHG linkages, and funds developmental initiatives under schemes like RIDF and Rural Innovation Fund.
What is the maximum project cost eligible under PMEGP for rural non-farm sector?
Manufacturing: Rs 25 lakh; Service sector: Rs 10 lakh.
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