Question

How can the formal sector loans be made beneficial for poor farmers and worker?

Answer 1

Because of low interest rate

Answer 2

1. Their is a need to increase the lending activities of the formal sector in rural areas, to reduce the dependence on the informal sector of credits.

2. Informal sources like Moneylender, charges a high interest rate whereas bank charges less interest rate on loans taken, so it increase the income of borrowers.

3. Their is also a necessary need to distribute the loans from formal sector equally to the poor people.

4. Their is a need to set up banks to several places in rural areas, so that poor farmers can borrow at cheap rate.

5. Their is a need that large share of these loans also given to poor farmers and workers to set up their own business and small scale industries.