Reasons for formal credit not being available to the rural people are ?

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Lack of proper documentation

Lack of awareness

Lack of collateral

All of the above

answer is D.

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Detailed Solution

Reasons for formal credit not being available to the rural people are lack of proper documentation, lack of awareness and lack of collateral .
Formal credit is not available to rural people because of the various conditions that lead them to be dependent on informal sources of credit. Rural residents lack proper documentation of employment, earnings, and so on to persuade banks that they will repay the loan. They may not have any property that can be used as collateral or security in the event of a loan default. Moreover, rural people are not aware of the credit facilities provided by the formal sector. Also, the availability of formal sources is lower in villages. They are thus betrayed and exploited by their informal sources and are not able to trust formal sources so easily.

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