Question

why do we need to expand formal sources of credit in India ? explain (only 3 points)
​

Answer 1

Explanation:

We need formal sources of credit in order to reduce the dependence of farmers on informal sources of credit like money lenders. To reduce the higher risk associated with informal sources of credit because of fluctuating terms and conditions. To avail cheaper credit to farmers in rural areas.

please mark me as brainliest ⭐♥️

Answer 2

Answer:

We need to expand formal sources of credit due to the following reasons

1) Rate of interest is less than the informal sources of credit.

2) Prevents Debt trap condition

3) Improves livelihood of the loan takers or borrowers