Second, spread of financial literacy across all sections of the society by creating awareness about financial products and services among the population. Third, greater regulatory incentives through liberalisation of interest rates and branch licensing. Banks have been given complete freedom to price their advances so that lending in the rural areas could be a commercial proposition.
Given the lower penetration of formal credit and recourse to money lenders what matters is the availability of credit rather than the cost. Banks have also been given the freedom to open branches in centres with population of less than 1,00,000. Fourth, use of technology and innovative delivery models so that the cost for providing large quantum of small-ticket transactions could be brought down.