(a) Why is there a need to expand rural credit?

money-and-credit

#1

(a) Why is there a need to expand rural credit?
(b) Suggest some ways by which rural poor can get , cheap credit.


#2

(a) Due to following reasons there is need to expand rural credit
(i) The expansion of formal sources of rural credit is essential to save poor from the high rate of interest of moneylenders and debt-trap.
(ii) Cheap and easily available credit can encourage self employment like small scale industries or business. It can lead to higher income and contribute to the country’s development.
(b) Rural poors can get cheap loans from sources like cooperatives banks, Self Help Groups, regional rural banks, etc.