Question

why are informal sources of credit prefer in rural areas

Answer 1

In formal sources there is high rate of interest.Due to which people cant pay back.And if they can't pay back then there property will be seized.It also requires some security assets which poor people don't have.So there they face lots of problems so they prefer informal sources like friends,relative,etc. It doesnt require any think it is based on mutual trust..
*************hope it helps u***************

Answer 2

Answer:

Kindly see the attachment from evergreen guide...