Poor Households Still Depend on Informal Source of Credit. Support the Statement With Examples.

Yes, it is true that the poor households still depend on informal source of credit. It is due to the following reasons:

  1. Banks are not present everywhere.
  2. Collateral is required by the formal sector loan providers.
  3. Many a time, the moneylenders know the borrowers personally and willing to pay the loan without any collateral.

Related posts:

  1. Deposits With the Banks Are Beneficial to the Depositors as Well as to the Nation. Examine the Statement.
  2. What Is a Collateral? Why Do Lenders Ask for Collateral While Lending? Explain.
  3. How Does the Use of Money Make the Exchange of Things Easier? Explain With Examples.
  4. How Do Self-Help Groups Help Borrowers to Overcome the Problem of Lack of Collateral? Explain With an Example.

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