What are the main reasons for formal credit not being available to the rural poor?
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The two main reasons for formal credit not being available to rural poor are : (i) Absence of collateral and documentation is the main reason which prevents rural poor from getting bank loans. (ii) The arrangements of informal sector loans are flexible in terms of timelines, procedural requirements, interest rates etc.
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Answer:1.Bank is not within the reach of every rural people.
2.Bank ask for collateral while lending. Due to lack of the collateral poor people are not able to take loan from formal sector.
Explanation:
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