Question

Why do you think that the share of formal sector credit is higher for the richer households compared to the poor households

Answer 1

Answer:

in my opinion this is because the poor households have very less collateral or no Collateral to pay the bank ok whereas richer households arable to to provide colleteal easily. hence formal sector of credit is higher for the richer households as compared to poor and also this can be reason that the bankthinkd that a richer man could easily serve interest as compared to poor

Answer 2

ᴛʜᴇ sʜᴀʀᴇ ᴏғ ᴛʜᴇ ғᴏʀᴍᴀʟ sᴇᴄᴛᴏʀ ᴄʀᴇᴅɪᴛ ɪs ʜɪɢʜᴇʀ ғᴏʀ ᴛʜᴇ ʀɪᴄʜᴇʀ ʜᴏᴜsᴇʜᴏʟᴅs ʙᴇᴄᴀᴜsᴇ ᴛʜᴇ ʀɪᴄʜᴇʀ ʜᴏᴜsᴇʜᴏʟᴅs ᴀʀᴇ ɪɴ ᴀ ʙᴇᴛᴛᴇʀ ᴘᴏsɪᴛɪᴏɴ ᴛᴏ ᴘʀᴏᴠɪᴅᴇ ᴄᴏʟʟᴀᴛᴇʀᴀʟ ᴀɴᴅ ᴏᴛʜᴇʀ ɴᴇᴄᴇssᴀʀʏ ᴅᴏᴄᴜᴍᴇɴᴛs ᴡʜɪᴄʜ ᴀʀᴇ ʀᴇϙᴜɪʀᴇᴅ ʙʏ ᴛʜᴇ ʙᴀɴᴋs ᴀɴᴅ ᴄᴏ-ᴏᴘᴇʀᴀᴛɪᴠᴇs. ... ɪɴ sɪᴛᴜᴀᴛɪᴏɴs ᴡɪᴛʜ ʜɪɢʜ ʀɪsᴋs, ᴄʀᴇᴅɪᴛ ᴍɪɢʜᴛ ᴄʀᴇᴀᴛᴇ ғᴜᴛᴜʀᴇ ᴘʀᴏʙʟᴇᴍs ғᴏʀ ᴛʜᴇ ʙᴏʀʀᴏᴡᴇʀ.