Question

What are the two main sources of formal sector loans in india ? Why do you need to expand formal sorces of credit?

Answer 1

The two major sources of formal' sources of credit are : (a) Banks and (b) Cooperatives. Need to expand formal sources of credit are: (a) To save the poor farmers and workers from the exploitation by the informal sector credit.

Answer 2

Explanation:

The two major sources of formal sources of credit are:

(i) Banks and (ii) Cooperatives.

Need to expand formal sources of credit are :

people through providing cheap and affordable credit.(i) To save the poor farmers and workers from the exploitation by the informal sector credit.

(ii) The two major sources of formal sources of credit are:

(i) Banks and (ii) Cooperatives.

Need to expand formal sources of credit are :

(i) To save the poor farmers and workers from the exploitation by the informal sector credit.

(ii) Informal sector charges a higher interest on loans which means that a large part of the earnings is used to repay the loan.

(iii) Formal credit can fulfil various needs of the people through providing cheap and affordable credit.