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Why do we need to expand formal sources of credit in India? - Social Science

Answer in Brief

Why do we need to expand formal sources of credit in India?

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Solution

We need to expand formal sources of credit in India for two main reasons. Firstly, to reduce dependence on informal sources of credit because the latter charge high-interest rates and do not benefit the borrower much. Secondly, they will be able to provide loans to a larger group of people who trust the government sanctioning more than a private loaning system.

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