Question

why do we need to expand formal sources of credit in india.explain​

Answer 1

Answer:

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It is necessary that banks and cooperatives increase their lending particularly in the rural areas, so that the dependence of the poor on informal sources of credit reduces. . It is important that the formal credit is distributed more equally so that the poor can benefit from the cheaper loans.

Answer 2

To give profit to small-scale industries and to provide loans to the poor so we need to expand formal sources.

What are the characteristics of formal sources of credit?

• It includes banks and cooperative societies which are governed by the Reserve Bank of India
• It gives loans to the poor at a very low rate of interest so that they easily take loans
• Reserve Bank of India regulates that they give loans to all businesses and traders
• The loan is distributed equally to all small scale and large scale business