Another failing of the existing macro models is that financial frictions affect firms (or households) and limit their ability to raise external finance, but not banks’ fund-raising activity. Banks are generally assumed to be able to collect deposits from households and to distribute them without delay to firms in the form of loans. Clearly, this assumption is a simplification of reality.
Reaching out to the rural areas An area that your association may be of help to us in this regard is encouraging through your education campaigns and drives the smaller thrift and rural banks to be more e-savvy.