Advertisements
Advertisements
प्रश्न
Why do we need to expand formal sources of credit in India?
Advertisements
उत्तर
- Informal loans are far more expensive and often result in debt traps. Also, the high cost of borrowing in this situation could keep people from starting a new business through borrowing.
- The majority of loans from unofficial lenders have extremely high interest rates and don’t significantly raise borrowers’ incomes. Therefore, in order to reduce the hungry population’s need for unofficial sources of credit, banks and cooperatives must expand their lending, especially in rural areas.
- In order for the poor to take advantage of the lower-cost loans, it is critical that formal credit be split more fairly.
APPEARS IN
संबंधित प्रश्न
Compare formal sector loans with informal sector of loans regarding interest only.
Which one of the following is a formal source of credit?
How do banks mediate between those who have surplus money and those who need money?
Majority of the credit needs of the ______ households are met from informal sources.
______ costs of borrowing increase the debt-burden.
“Credit can play a positive role.” Justify the statement with arguments.
Answer the following question.
Describe the importance of formal sources of credit in economic development.
Answer the following question.
Describe the bad effects of informal sources of credit on borrowers.
Answer the following question.
Give any two examples of the informal sector of credit.
Answer the following question.
Why is cheap and affordable credit important for the country's development? Explain any three reasons.
