Question

what are the various sources of credit in rural areas which one of them is the most dominant source of credit and why

Answer 1

there are various sources of credit in rural areas are:relatives,friends,money lenders and traders.Most dominant source of credit is money lenders. It is because small farmers are poor, illiterate and cannot fulfill the conditions of co-laterals.

Answer 2

The rural economy is way more smaller in scale than the urban economy.

The various sources of the financial credit in the rural areas are:

1) Small scale banks.

2) Local Mahajan.

3) Credits given by the Panchayat system.

Among these credit sources,the Mahajan's credit source is still the most dominant credit source in the rural areas.

But due to rapid modernization,the Mahajan system will be soon replaced by the modern and reliable banking companies.