Question

How do formal and informal sources of credit affect the rural people in India?​

Answer 1

Answer:

Money lenders are the main informal source of credit for rural household in India. Because in rural areas people can't access to banks and other financial institutions.

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Answer 2

Explanation:

Rural credit markets in India is characterised by the coexistence of both formal and informal sources of finance and the market is fragmented. ... However, about two-fifth of the rural households' dependence on informal credit, even today, indicates further scope for financial inclusion in rural areas.