explain the term "debt trap".why is it seen more in rural areas?give two reasons.
for class 10
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debt trap is a situation in which borrower is unable to pay previous loan and he takes new loan. This is called Debt Trap.
it is seen more in rural areas because :-
1.they have lack of collateral or documents to apply for formal source of loan
2.the rate of intrest is more set by informal sources so the money that is to be given back increases than money taken so instead of improvement in debit situation or profit they face debt trap
Explanation:
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