Question

The credit activities of the informal sector should be discouraged . support the statement class 10

Answer 1

Answer:

The credit activities of the informal sector should be discouraged because: 85% of loans taken by the poor households in the urban areas are from informal sources. ... Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan.

Explanation:

Answer 2

Answer:

Credit Activities of the informal sector should be discouraged:

• Most loans from informal lenders carry a very high interest rate and do little to increase the income of the borrowers.
• The poor households have to pay a large amount for borrowing.
• 85% of the loans taken by poor households in the urban areas are from informal sources.
• Cheap and affordable credit is crucial for the country’s development.

I hope this will helps you.

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