Question

why do poor household rely on informal sources of credit till today

Answer 1

For the large number of poor people in our country, it becomes difficult to avail loans from formal sources of credit, such as the Bank, etc. due to the lack of proper Collateral, documentation, etc. As a result, they are bound to take the help of informal sources of credit, who charge high interest rates, even if they usually do not require Collateral and documentation...

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