Why do you think that the share of formal sector credit is higher for the richer households compared to the poorer households?
The share of the formal sector credit is higher for the richer households. It is so because the richer households are in a better position to provide collateral and other necessary documents which are required by the banks and cooperatives. Richer households have means to exert pressure on banks and cooperatives to sanction loans.
These households have greater capacity to repay the loans 'compared to the poor households.