why does banking system fail in providing rural credit? from rural development economics class 11th its urgent.....
Dear student,
Banking system failed in providing rural credit due to following reasons:
1) banking system involves certain formalities and rural people do not wish to invest their time in procedures and formalities laid down by banks.
2) Banks provides credit to individual after being satisfied about the credit worthiness of borrower. This limits the availability of credit.
3) Rural people prefer to avail credit from the moneylenders whom they know personally, this too was main reason of failure of banking system in rural area.
Regards
Banking system failed in providing rural credit due to following reasons:
1) banking system involves certain formalities and rural people do not wish to invest their time in procedures and formalities laid down by banks.
2) Banks provides credit to individual after being satisfied about the credit worthiness of borrower. This limits the availability of credit.
3) Rural people prefer to avail credit from the moneylenders whom they know personally, this too was main reason of failure of banking system in rural area.
Regards