Question

why do poor households rely on informal sources of credit till today​

Answer 1

Poor household still depends on informal source of credit because formal source of credit like bank provide loan only for productive purpose but moneylenders, landlords provide loan for all things. Formal source of credit requires a lot of paper work but it is not needed in informal source of credit.

Answer 2

Answer:

it's because informal source of credit doesn't require any collateral which the poor household lack whereas a credit from formal sources of credit requires collateral.