Question

1. In situations with high risks, credit might create further problems for the borrower. Explain.

Answer 1

Answer:

in situation with high risks , credit might create further problems for the borrower . This us also known as a debt trap. Taking credit involves an interest rate on the loan and if this is not paid back , then the borrower is forced to give up his collateral or asset used as the guarantee, to the lender...

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Answer 2

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In situations with high risks, credit might create further problems for the borrower.

• He has to repay the credit along with the interest applied by the lender.
• This increases the problems for the borrower.
• In such a situation, he is forced to give up his collateral or asset used as the guarantee, to the lender.