Question

Why is cheap and affordable credit important for the country's development? Explain any 5 reasons.

Answer 1

HEY MATE HERE IS YOUR ANSWER--

Cheap and affordable credit plays a crucial role for the country’s development.Reasons are:-

(i) The credit helps people to meet the ongoing expenses of production and thereby develops their businesses in agricultural and industrial areas.

(ii) For middle-class people, loans help a lot in constructing their houses and get rid of monthly rents.

.(iii) It raises the standard of living and social status of the common man by enabling them to buy automobiles, electronic items, etc.

(iv) It enables more investment which will lead to acceleration of economic activities.

(v) Affordable credit would also end the cycle of debt trap.

Answer 2

Credit for country development:

(1) Higher cost of borrowing means a large part of the earnings of the borrower is used to repay the loan. Hence, borrower have less income left for themselves.

(2) In certain cases, the high interest rate of borrowing can mean that the amount to be repaid is greater than the income of the borrower. This could lead to debt trap. For these reasons,banks and co-operative society need to lend more.

(3) This would lead to higher incomes and many people could then borrow cheaply for a variety of needs.

(4)They could grow crops, do business , set-up small-scale scale industries,etc.

(5) They could Set-up new industries or trade goods.

--Hope it helps you.--