Which one of the following is NOT an informal sector loan provider for poor rural households in India?

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Commercial banks

Moneylenders

Traders

Landlords

answer is A.

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Detailed Solution

Commercial banks are not informal sector loan providers for poor rural households in India.
Since commercial banks lend out loans after proper documentation and terms of credit, and since it comes under the formal sector sources of credit, they are not an informal sector loan provider for poor rural households in India. On the other hand, moneylenders and traders lend money to people requiring credit. They usually do not require much documentation or collateral, thereby being classified as informal sources of credit. Therefore, it is usually the informal credit sources from which poor rural households take their loans since they do not have sufficient collateral to apply for bank loans.

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