Question

Assertion- The credit activities of the informal sector should be discouraged.

Reason- Getting a loan from bank is much more difficult than taking a loan from the informal

sources.

(a)Both A and R are true R is the correct explanation of A

(b)Both A and R are true R is not the correct explanation of A

(c)A is wrong but R is correct

(d)A is correct but R is wrong​

Answer 1

Answer:

In certain cases, the high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower. This could lead to increasing debt and debt trap, therefore the credit activities of the informal sector should be discouraged

Explanation: In certain cases, the high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower. This could lead to increasing debt and debt trap, therefore the credit activities of the informal sector should be discouraged