Question

The credit activities of the informal sector should be discouraged . support the statement with arguments .

Answer 1

1) They charge a high rate of interest from the borrowers.

2) This means a large part of the earnings of the borrower is used to repay the loans.

3) They may even fall into a debt trap.

4) The informal sector often cheat the borrowers and use unfair means to get their money back.

5) Credit activities of informal sector should be discouraged to save the poor people, especially farmers and landless laborers from exploitation.

hope this helps! i have tried my best to simplify!

Answer 2

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1. 85℅ of credits taken by the helpless family units in the urban zones are from casual sources.

2. Casual moneylenders charge high enthusiasm on their credits.

3. There are no limits and limitations.

4. Greater expense of acquiring implies a bigger piece of the income of the borrowers is utilized to reimburse the advances.

5. In specific cases the high loan cost for obtaining can imply that the sum to be reimbursed is more prominent than the pay of the borrower.

6. This could prompt expanding obligation and obligation trap along these lines the credit exercises of the casual part ought to be debilitated.