CREDIT(LOAN)ACTIVITIES OF BANKS Whether Credit would be useful or not? Depends on the Risk in the situation.
2.Credit is for Crop Production
Credit plays a vital and positive role if made a good profit. If crop failure, credit pushes the person into a debt trap.
SOURCES OF CREDIT for Rural Households in India 30% Moneylenders 25% Commercial Banks 27% Cooperative Societies Landlords 3% 7% 7 % 1% Traders Relatives and Friends Others
Why are Poor Households still dependent on Informal Sources of credit.?
Banks are not present everywhere in rural India.
Loan from a bank is much more difficult than taking a loan from informal sources.
Bank loans require proper documents and collateral.
Informal lenders know the borrowers
personally and give a loan without collateral.
Newer Ways of Providing Loans to the Poor SELF HELOP GROUPS A women’s self-help group meeting in Gujarat . 1.Banks are willing to lend to the poor women when organized in SHGs, even though they have no collateral as such. 2.The poor should get a much greater share of formal loans from banks, cooperative societies etc. Both these steps are important for development .
THANKS BY J K DOGRA PGT ECO KV NO-3,DELHI CANTT.