most of the credit needs of the poor households are met from informal sources.The dependence of richer households on informal credit is less.do you agree?use the data given in page 114 to support your answer
Answers
Answer: Majority of the credit needs of poor households are met from informal sources.
Poor households often get exploited with higher interest from money lenders.
Poor households borrow money from money lenders because they don't have any form of security (collateral) as requested by the formal sources of credit.
Answer:
most of the credit needs of the poor households are met through informal sources the dependence of richer households on informal credit is less do you agree.
Explanation:
Many people from poor house holds rely on informal sources for credit. This is due to the fact that poor households lack the requisite documentation and a lack of assets for collateral.
Poor households also tend to have poor credit ratings thus they got locked out of the formal sources of credit like banks.
Rich households on the other hand tend to have good working relationships with banks. They also tend to have a good credit history and adequate documentation.
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