What do you mean by institutional sources of credit ? Explain its objectives

indian-economy
cbse

#1

Agricultural credit is very important for the development of agriculture. Private money orders were not sufficient to meet the required demand of the farmers. So after independence multi-agency approach as an institutional credit was adopted in India. Multi-agency approach consists of co¬operatives, commercial banks and regional rural banks. It is called national policy also.
Main objectives of this policy are as follows :
(i) To reduce the importance of money lenders
and to abolish them gradually from rural areas.
(ii) To reduce regional imbalances.