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.

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