Question

why should banks and cooperatives societies provide more loan facilities to the rural house hold in India

Answer 1

Although agriculture contributes only 21% of India ’s GDP, its importance in the country’s economic, social, and political arenas cannot be neglected. The rural areas are still home to approximately 72 percent of the India ’s 1.21 billion people, a large number of whom are poor. Most of the rural poor depend on rain-fed agriculture and fragile forests for their livelihoods. There are many obstacle in the way of rural population to acquire loan some of which are as follows.
1. Inefficiencies in the formal finance institutions.
2. Weak regulatory framework.
3. High transaction costs
4. Risks associated with lending to agriculture.