Why there is a great need to expand formal sector credit in rural areas?
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The reason why there is a great need to expand formal sources of credit in rural areas is because the informal sources charge a very high rate of interest compared to the formal sector and because of that poor people fall into debt trap form which recovery is very painful and due to this a lot of poor people give up one their lives.
The other reason might be that it helps in reducing corruption in the country as the money lenders might take a lot of money from them after the loan repayment without the uneducated poor people knowing.
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