Question

In a rural india credit often pushes the prson into a debt trap . Explain with exmples

Answer 1

when cultivation of any crop is dependent of rain which is a natural resource, then the. cultivation becomes risky if it doesn't rain properly. in this case when rain fails there is crop failure then credit pushes the person into debit trap. to repay the loan the farmer had to sell everything he has which becomes a worse situation than before crediting. whether credit would be useful or not depends on the risk in the situation.


hope it helps....