economicsThere is a great need to expand formal sources of credit in rural India.

There is a great need to expand formal sources of credit in rural India.


  1. A
    True
  2. B
    False 

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    Solution:

    The above statement is true.
    There is a need to expand formal sources of credit in rural India. People from rural areas find it difficult to take credit from formal sources for several reasons, due to less availability in rural areas, due to lack of collateral, or due to many document requirements. As informal sources exploit people by charging high rates of interest and using unfair means to get their money back, people might get stuck in the problem of increasing debt and a debt trap. Thus, there is a need for banks and cooperative societies to increase their presence in rural areas so that people stop turning to informal sources.
     
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