While formal sector loans need to expand, it is also necessary that everyone receives these loans. Comment
Answers
Answer:
Formal sector loans can be made beneficial for poor farmers and workers in the following ways:
(i) Create awareness to farmers about formal sector loans.
(ii) Process of providing loans should be made easier.
(iii) It should be simple, fast and timely.
(iv) More number of Nationalized Banks/Cooperative banks should be opened in rural sector.
(v) Banks and cooperatives should increase facility of providing loans so that dependence on informal sources of credit reduces.
(vi) The benefits of loans should be extended to poor farmers and small scale industries.
(vii) While formal sector loans need to expand, it is also necessary that everyone receives these loans.
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Explanation:
Answer :
Indeed , while the formal sector loans need to expand , it is also necessary that everyone recieves these loans due to following reasons , some of which are
1. At present it is the richest household who receives formal credit services where the poor have to depend on informal sources
2. it is essential to reduce their ( rural areas) dependency on informal resources hence formal resources should be in reach of everyone
3. Statistics have shown that about 85 percent of loans are taken via Informal resouces and only 15 percent from formal one which depicts their dependence on Informal resouces and frequency of exponential increase in dept trap
4. Most Importantly , Cheap and affordable credit is crucial for any country's development hence While formal sector loans need to expand , it is also necessary that everyone recieves these loan equally .
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