Question

Poor households still depend on informal sources of credit”. Support the statement with examples.​

Answer 1

Answer:

Poor household still depend on informal sources of credit like a farmer living in a rural area wants a loan to grow crops in his field, he will take loan from a big farmer which is a informal source because we take loans from banks and banks do not give loans to poor households as there is no surety that he/she can return the money so he takes money from a money lender in his area.

Answer 2

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1. Banks are absent wherever on rustic region.

2. In any event, when they are available, getting a credit from the bank is significantly more troublesome than taking an advance from casual sources.

3. Uber banks or open banks require appropriate records and insurance.

4. Nonattendance of insurance is one of the significant reasons which keeps the poor from getting bank advances.

5. Casual moneylenders, for example, cash banks know the borrowers by and by and they are happy to give an advances without insurance.