Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas?

CBSE Class 10 CBSE Class 10 Social Science
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1

Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Explain.

2

BANKS and Cooperatives can help people in obtaining cheap and affordable loans. This will help people to grow crops, do business set up small scale industries or trade goods and also help indirectly in the country’s development.

  • They should do so, so that relatively poor people do not have to depend on informed sources of credit.
  • Formal sector loans need to expand. It is also necessary that-everyone receives these loans.
  • At present it is the richer households who receive formal credit whereas the poor have to depend on informal sources. It is important that the formal credit is distributed more equally so that poor can be benefitted from the cheaper loans.