MFIs versus moneylenders

Although the share of rural credit provided by informal financiers may have come down sharply over the years—69.7% in 1951 to 29.6% in 2002 and possibly even further now—two-fifths of rural households still depend on such sources. More importantly, small and marginal farmers are at the mercy of the moneylender because they aren’t able to access even the cooperatives or regional rural banks let alone commercial banks.

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