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Sustainable Rural Development

how can we re...

Question

how can we reduce the role of informal sector credit ?

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Solution

One of the methods to reduce the role of informal sector credit is to work towards increasing the lending activities of commercial banks and cooperatives such that cheap and affordable credit available in rural areas.

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Q. Compare the contribution of formal and informal credit between urban poor and rich households. Give any two suggestions to increase the role of formal sector in credit creation.

Q. Give any two examples of informal sector of credit.

Q. The formal sector meets only about half of the total credit needs of the rural people. The remaining credit needs are met through the informal sources. Most of the loans from the informal lenders have very high interest rates and do little to increase the income of the borrowers.

What do you suggest is the best way to reduce the dependence on informal credit?

Q. Choose the correct option related to sources of credit from the formal and informal sectors.

___ means giving greater role to the private sector in the national building process and drastically reducing the role of the public sector.

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