Why rich families formally gets more credit in comparison to poor families?
Answers
Answer:
see all are born equal in their life, but the difference is that rich families are educated while poor are little educated . only this is the difference. it depends upon their thinking power.
Sources of agricultural credit can be broadly classified into institutional and non-institutional sources. Non-Institutional sources include moneylenders, traders and commission agents, relatives and landlords, but institutional sources include co-operatives, commercial banks including the SBI Group, RBI and NABARD.
The short term and medium term loan requirements of Indian are mostly met by moneylenders, co-operative credit societies and Government. But the long-term loan requirements of the are also met by moneylenders, land development banks and the Government.
Two suggestions to increase the role of formal sector in credit creation.
1) Adequate number of branches should be open in rural & backward areas.
The procedure to get the loan is time consuming.It should be reduced
plz mark this as brainliest answer.
The reasons are:
1. most of the rich families live in urban areas where there is facility of banks.
2. they have collateral for loan so it is safe to give loan to them.
3. most of the poor people live in rural areas where there is no facility of banks.
4.poor people lack collateral.
5. most of the poor people work in unorganised sector where there is no job security.
6. many poor people are engaged in farming which has risks like crop failure.