Analyse the role of credit for development.
The role of credit for development:
(i)Credit is available normally from two sources. These can be either formal sources or informal sources.
(ii)Terms of credit vary substantially between formal and informal lenders. At present, it is the richer households who receive credit from formal sources whereas the poor have to depend on the informal sources. It is essential in modern economy to make terms of credit flexible with formal sources of credit e.g. Banks etc. in order to safeguard interests of the poor sections of society in India.
(iii) In prevailing situations, if credit can be made available to the poor people on terms and conditions that are appropriate and reasonable, these millions of small entrepreneurs with their millions of small pursuits can add up to create the biggest development wonder.
