Question

What's are problems due to informal source of credits?

Answer 1

If we take credit frm infornmal sources then the following r the problems:-)
1) Informal source of credit involves moneylenders and rich landowners who give us the credit but at a very high interest rate.
2)They do not have any proof of credit taken as they did not have any agreements
3)They can give the interest rate to us according to their wish.The RBI cannot question them for doing so.
4)If we r not able to pay the loan then they would take our house and lands according to the money pending and would leave us in a critical situation known as debt trap.
Hope this will help you.Don't forget to mark like