Question

banks and cooperatives help people in obtaining cheap and affordable loans. Which values according to you does this include .

Answer 1

Answer:

Banks and cooperatives help people:

1. The informal sector lends at a high-interest rate especially in the rural areas so much of the income of the borrower goes in repaying loans rather than investing it.

2. Often it leads to debt trap where the amount to be repaid is more than the borrower's income and he has to borrow more.

3. Affordable loans from formal sector would lead to a higher income which they may use for other needs.

4. The poor may use it for growing crops, doing business or even setting up a small-scale industry.

5. If people are able to invest, it would help in the development of the country.

Explanation:

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Answer 2

Bank and cooperatives provide affordable loans but they have to increase the lending facilities to the people.

• Bank and cooperatives represent the formal sector and the individual money lenders represent the informal sector that provides a high-interest rate for the rural people.

• The loans that are affordable that are obtained from the formal sector can provide higher income.

• The rural can use this income for investing in crops, farming, buying essential items, etc.

• This will result in the development of the country.