Question

poor householders still depend on informal sources of credit why?​

Answer 1

Explanation:

Bank loans require proper documents and a collateral. Absence of collateral is one of the major reasons which prevents the poor from getting bank loans. ... The borrowers can, if necessary, approach the moneylender even without repaying their earlier loans.

Answer 2

Poor householders still depend on informal sources of credit because of following reason:

1. Banks are not present everywhere on rural area.

2. Difficulty in taking loan from formal sector. Documentation is necessary.

3. Formal sector require proper documents and collateral.

4 Informal lenders such as money lenders they know the borrowers personally and they are willing to give a loan without collateral.

I hope it will help you ^_^