Q. 285.0( 1 Vote )

“Banks and cooper

Answer :

Banks and cooperatives help people:

1. The informal sector lends at a high-interest rate especially in the rural areas so much of the income of the borrower goes in repaying loans rather than investing it.

2. 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.

3. Affordable loans from formal sector would lead to a higher income which they may use for other needs.

4. The poor may use it for growing crops, doing business or even setting up a small-scale industry.

5. If people are able to invest, it would help in the development of the country.

Explanation: Without the benefits of the formal sector, rural households have no option other than going to informal lenders who only exploit them.

Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Related Videos
Glimpses of IndiaGlimpses of IndiaGlimpses of India39 mins
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
view all courses