Question

How can the formal sector loans be made beneficial for poor farmers and workers? Suggest any 5 measures.

Answer 1

The formal sector loans can be made beneficial for poor farmers and workers by:
1. Decreasing the interest rate so that even very poor farmers and workers can take loans.
2. Decreasing the terms of credit like collateral so that anyone even without assets can take loans and benefit from them.
3. Decreasing the paper work and the procedures required so that even uneducated people can take the loans.
4. Passing laws or taking actions against informal sector lenders like money lenders etc
5. Promoting self-help groups to which banks and cooperatives like to give the loans.
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