Question

Prove with an argument that there is a great need to expand formal sources of credit in rural India

Answer 1

To expand formal sources of credit in rural India, dependence on informal sources of credit has to be reduced.

Answer 2

• There is a great need to expand formal sources of credit in rural India because there is no organization which supervises the credit activities of lenders in the informal sector.
• They lend at whatever interest rate they want and use unfair means of getting their money back.