Question

Explain any three reasons for the banks and cooperative societies to increase their lending facilities in rural areas.

Answer 1

In order to improve the credit situation in India, it is important to provide cheap loans and credit schemes must expand in rural households. To set up more banks in rural remote areas, making people aware of cooperatives, SHG's. These sources must extend their services in rural areas and try to reach out to all. Providing loans with a reasonable interest rate, generating greater awareness among people about formal sources so as to reduce their dependence on the informal sector. It will also prevent people from getting exploited through borrowings from informal sources. To serve as building blocks for rural households. This will help people to start up their small business, or trade-in certain goods. It can also help farmers to expand cultivation, to diversify their production. People can also set up small scale industries. It can certainly be an engine of growth.