Question

cheap and affordable credit in the poor household is essential in rular and urban

Answer 1

Cheap and affordable credit is essential for poor households:

1. The informal sector lends at a high-interest rate in rural areas so the cost for the borrower is much more.

2. When the cost of borrowing of more, large portion of income goes in repaying loans rather than investing it.

3. 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

Answer 2

Cheap and affordable credit is essential for poor households:

1. The informal sector lends at a high-interest rate in rural areas so the cost for the borrower is much more.

2. When the cost of borrowing of more, large portion of income goes in repaying loans rather than investing it.

3. 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.

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