why are the credit arrangements note fare for all section of society ?give three reason suggest any remeidts of the problem
Answers
Answer:
1) In both rural and urban areas, rich households have access to cheap credit from formal sources like banks.
2) This is because rich households (irrespective of caste and religion) are able to provide necessary documents and collateral for the loan from banks.
3) Formal lenders are not present in all rural areas, and the high interest rate charged by local moneylenders’ results in debt trap due to which they are not able to come out of it.
Remedies:
1) Self Help Groups are an effective solution as collectively poor people have better bargaining power and each group is able to pay back the loan in a better way.
2) Mobile branches of banks which have a fixed beat for villages would also be cost effective in bringing credit to rural poor.
Answer:
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