Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas ? Explain. -SST 10th

Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas ? Explain. -SST 10th
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Answer :

Banks and cooperatives should increase lending facilities in rural areas: 1. The informal sector lends at a high-interest rate in rural areas so the cost for the borrower is much more. 2. When the cost of borrowing of more, large portion of income goes in repaying loans rather than investing it.  3. Often it leads to debt trap where the amount to be repaid is more than the borrower's income and he has to borrow more.
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Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Explain. -SST 10th

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Last Answer : Most loans from informal lenders carry a very high interest rate and do little to increase the income of the borrowers. Hence, it is necessary that banks and cooperatives increase their lending ... the formal credit is distributed more equally so that the poor can benefit from the cheaper loans.

Why is it necessary that banks and co-operatives increase their lending in rural areas ? Explain. -SST 10th

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Last Answer : 1. The formal sector i.e. the banks and the cooperatives need to engage more in the lending activities because of the disadvantages posed by the informal sector. 2. There is no organisation ... business, set up small scale industries etc which would add to the development aspect of a country.

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Why should the banks and cooperatives societies provide more loan facilities to the rural households in India? -SST 10th

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