How can the formal sector loans be made beneficial for poor farmers and workers? Explain.

i. To save poor farmers and workers from the exploitation.

ii. Formal sector charge a low interest rate on loans.

iii. To save from debt trap.

iv. It provides cheap and affordable credit.

v. RBI supervises the formal sector credit through various rules and regulations which ensures that banks give loans to small cultivators, small borrowers etc. and not just to profit – making business and traders.