Question

Which households avail credit from informal sectors in urban areas?
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Answer 1

Answer:

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Sources of agricultural credit can be broadly classified into institutional and non-institutional sources. Non-Institutional sources include moneylenders, traders and commission agents, relatives and landlords, but institutional sources include co-operatives, commercial banks including the SBI Group, RBI and NABARD.

The short term and medium term loan requirements of Indian are mostly met by moneylenders, co-operative credit societies and Government. But the long-term loan requirements of the are also met by moneylenders, land development banks and the Government.

Two suggestions to increase the role of formal sector in credit creation.

1) Adequate number of branches should be open in rural & backward areas.

The procedure to get the loan is time consuming.It should be reduced