One of the primary reasons for the expansion of loans in the formal sector is the growth of the economy.
As the economy grows, there is an increase in the demand for credit.
This demand is met by financial institutions in the formal sector, which offers loans to individuals and businesses.
The growth of the economy also creates more opportunities for businesses to expand, which requires additional capital.
The formal sector provides this capital through loans, which helps businesses grow and create jobs.
Another factor that contributes to the expansion of loans in the formal sector is the development of technology.
Technology has made it easier for financial institutions to offer loans to individuals and businesses.
For example, online lending platforms have made it possible for borrowers to apply for loans and receive funds quickly.