Question

How does availability of institutional credit impact the level of poverty in India

Answer 1

Analysis points at poor peasants best offer an entitlement set as mortgage comprised only of future shares of their harvest which itself is subject to risk.  

As a result money lenders can't advance loans without risking extensive loss of loanable funds.  

As landlords' income is subject to same risk as of peasants they advance loans to confirm that their own income isn't affected by peasants financial condition.  

Extension of institutional credit to peasants gives only subsidization of landlords.

Answer 2

The availability of institutional credit has an ‘important role’ in impacting the level of poverty in India. Poverty is one of the major issues in India and institutional credit play and an important role in the economic growth of the country. They have a significant role in the development of agriculture in India.

Explanation:

• India is one of the ‘fastest-growing economies’ and it has been ‘able to lift a good’ lot of people from living in ‘extreme poverty’.  

• The people in villages are given subsidized loans by the financial institutions for the benefit of agriculture.  

• There is a number of campaigns that have been started by the government for providing employment to the people and reduce the levels of poverty in the country.

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