Why do we need to expand formal sources of credit in India?

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There is need to expand formal sources of credit in India as:

(i)This would lead to higher incomes and many people could then borrow cheaply for a variety of needs.

(ii)They could grow crops, do business, set up small-scale industries etc.

(iii)They could set up new industries or trade in goods. Cheap and affordable credit is crucial for the country’s development.