In the 70 years since independence, it is clear that we in India have done a poor job of expanding access to credit, in terms of availability, in ensuring consistent risk-based pricing, and in providing good product designs. While most well-run financial systems, such as in the United Kingdom and Australia, report credit-to-GDP ratios exceeding 150%, in India not only is the aggregate number low at 60%, but it ranges from an estimated under 10% in the Kurung Kumay district (Arunachal Pradesh) to a high of 100% in Pathanamthitta (Kerala). These very low numbers suggest that poor access to credit may be acting as the single biggest impediment to the nation’s growth and equitable development.
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