Question

Dependence of people on formal and informal sector for credit​

Answer 1

Answer:

ANSWER

Rural population in India normally borrows money from money lenders at higher rates of interest.

Rural people seek money lenders(Informal source of credit) due to limited expansion of credit by the formal sectors in the rural areas.

Formal sectors in India are mostly urban biased and increasing their presence in the rural areas will reduce the dependence of rural people on the informal sector.

Money lenders (Informal sector source) lending system is unregulated, unlike formal sector.

The correct option is A.