Question

the credit activities pf the informal sectors should e discouraged, sxplain ​

Answer 1

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

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Answer 2

credit activities of informal sector should be discouraged as in informal sector moneylenders, relatives etc are responsible for providing credit and so they give credit at high interest rate also they keep no record of the money that they should get...and harass borrowers.