Question

Why do the poor households rely on informal credits till today?Explain.​

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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