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| 1. |
How are the cooperative functioning in rural areas to solve the problem of credit |
| Answer» \tBesides banks, the other major source of cheap credit in rural areas are the cooperatives.\tMembers of a cooperative, pool their resources for cooperation in certain areas.\tCooperatives form members, who accept deposits from its members. With these deposits as collateral, the cooperative obtains a large loan from the bank. These funds are used to provide loans to members. Once these loans are repaid, another round of lending can take place. | |