Question

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

Answer 1

HEY YOUR ANSWER

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1)Formal sources of credit a works under RBI supervision

2)They provide loan at fixed rate of interest

3) They don't uses unfair means

4) They provide loan at low rate of interest

5) It also helps in country's development

6) It reduces tension from mind of borrower as they don't use unfair means

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HOPE IT HELPS
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Please mark it brainliest

Answer 2

●Let us take an example of Lakshmi who is a small farmer have only two hectares of land.She got money from moneylenders to increase her production.Due to high rate of interest she became DEPT ON INTERESTS.
●If she might bought money in bank she might have paid less interest.
●So, to help small farmers like Lakshmi formal source of credit should be increased in India.
●Due to formal source of credit live of poor people can be secured and agricultural production as can be increased.
●For cultivation of Lakshmis land she need seeds, fertilizers, agricultural equipment etc.Being a poor farmer she cannot afford to buy all these .So she will have borrow money from moneylenders and pay HIGH INTEREST.If the local banks gave her credit at reasonable rate of interest, she will be able to all these in time and cultivate her land.
●You can also compare the percentage of poor households and rich households given in your book page no 49.
Hope this may help u.....
All the best for your social exam★♡♥