3 R’s of Credit
3 R's of credit are:
- All the above (Return, Repayment capacity, Risk bearing) — Correct Answer
- Return only
- Repayment capacity only
- Risk bearing only
Explanation:
Correct Answer: Return, Repayment capacity, Risk bearing
The 3 R's of Credit are: Return, Repayment capacity, and Risk bearing. These three factors are evaluated when assessing creditworthiness of a borrower, particularly in agricultural lending.
3 R's of Credit Explained
- Return: The expected income/profit that the borrower will earn from the loan investment — will the loan generate enough return?
- Repayment Capacity: The borrower's ability to repay the loan on time from their income streams.
- Risk Bearing: The borrower's capacity to absorb losses if the investment fails without defaulting.
Related: 3 C's of Credit
- Character: Honesty and willingness to repay
- Capital: Net worth / assets owned by the borrower
- Capacity: Ability to repay (similar to repayment capacity)
Credit in Animal Husbandry
- National Bank for Agriculture and Rural Development (NABARD) — established in 1982 — is the apex institution for agricultural credit in India.
📚 About this Topic — Animal Refresher
This multiple choice question is from Animal Refresher, Veterinary Extension Education. It has 4 options with a detailed explanation of the correct answer. Practice more MCQs from Animal Refresher to strengthen your preparation.
