Question

their and neet for expension of formal resource of india .explain?

Answer 1

the reason for expanding credit in India are
(1) high cost of borrowing leads to a major share of earnings going into payment of interest on the loans.
(2) sometimes the higher interest rate leads to the requirement to pay more than the earnings, thus falling into a debt-trap.
(3) borrowers falling into debt-traps discourage more people from borrowing, this reducing development of the country.
(4) banks and cooperative societies lending to more borrowers will lead to higher income and many people could then borrow cheaply for a variety of needs like growing crops, set-up business or small-scale industries.