Question

Why is it necessary that banks and co-operatives increase their lending in rural areas? Explain.(Delhi - Compartment 2016)

Answer 1

Answer:

☢it is necessary for the banks and cooperative societies to increase their lending facilities in rural areas because of the following reasons;

➊. India is an agricultural country so the people in rural areas deserve a special attention.hence, the banks and cooperative society should help the needy people in rural areas.

➋. mostly the people in rural areas are illiterate and hence they can be easily cheated by the money lenders.

➌. most loans from informal lenders carry a very high interest rate and do little to increase the income of the borrowers.hence, it is necessary that banks and cooperative increase their lending particularly in rural areas, show that the dependence on informal sources of credit reduces.

➍. only the banks and cooperative societies can provide loans to the rural household at cheap rates which can easily save them from the clutches of the money lenders.

➎. most of the people in urban areas depend upon the rural people for their food requirements, etc. and, their welfare is most important. hence the banks and cooperative societies should provide more facilities to the rural households in the matter of advancing loan.

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Answer 2

Answer:

It is necessary for banks and cooperatives to increase their lending in rural areas because the money lenders in rural areas are charging higher rates of interest and the rural people were unable to bear the interest cost..

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