Question

What is a debt trap?define it with example.

Answer 1

A debt trap is a situation in which a borrower is led into a cycle of re-borrowing, or rolling over, their loan payments because they are unable to afford the scheduled payments on the principal of a loan. These traps are usually caused by high-interest rates and short terms.

Answer 2

Heya

Here is your answer

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It is a situation which pushes the borrowers into a situation from which recovery is very  painful.

a) Failure of crops.

b) Using credit for non-productive purposes.

E.g: A farmer took credit to meet the expenses of cultivation unfortunately the crops failed and  he had to sell a part of his land to pay of the debt., so instead of increasing her earning her  earning he was in a debt trap.  

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Hope this helped!!!!

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