The main paradox of financial inclusion in rural India is access without actual usage: millions hold accounts they never operate, so accounts alone have not delivered inclusion. Informal credit persists because villagers trust local lenders and feel familiar with them — not because of documentation rules, interest rates, or missing government incentives. Accounts lie dormant where patriarchal norms, digital illiteracy, and lack of financial literacy prevail; mobile network expansion, by contrast, aids usage and does NOT cause dormancy. The author criticises the assumption that tools like OTPs can replace financial education: speed and biometrics cannot teach. The gender gap is cultural: women's financial agency is hindered chiefly by cultural factors, not by informal lenders, missing identity documents, or women leading decisions at home. Why do informal credit systems persist despite formal financial inclusion efforts?

Subject: English Language | Topic: Spotting Errors | Difficulty: MEDIUM

Options

1. (A) Due to strict documentation
2. (B) Trust and familiarity of local lenders
3. (C) Higher interest rates attract borrowers
4. (D) Government incentives are unavailable

Verified Answer

Option (B): Trust and familiarity of local lenders

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