BackThe financial inclusion drive that is failing Rural India
Rural households increased their borrowings in a significant way from private moneylenders, and not the organized financial sector, shows a NSS report
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So much for bringing rural India into the financial fold. Between 2002 and 2012, the number of rural households with bank accounts more than doubled in number. Yet, rural households increased their borrowings in a significant way from private moneylenders, and not the organized financial sector, shows a recently released National Sample Survey (NSS) report on indebtedness and asset holdings of 62,000 rural households across 4,529 villages and blocks.
Despite a 120% increase in rural households with bank accounts in the decade to 2011…
…it’s the informal moneylender, not the formal bank, that has gained share in rural credit
Rural households are borrowing short-term at high rates
Indebtedness is more among poorer households, who borrow more from moneylenders and more for non-business use
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