Question

Q)Most of the poor households are still dependent on informal sources of credit: Explain
the statement.​

Answer 1

Answer:

Poor households still depend on informal sources of credit because: Bank loans require proper documentation and collateral which is rarely available with poor households. Informal sources of credit such as moneylenders know the borrowers personally and are often willing to give a loan without a collateral.

Answer 2

Answer:

Because they don't have reliable income to live their lives.