Most of the poor households still dependent on informal sources of cre

1.	Most of the poor households still dependent on informal sources of credit explain 5 marks question
Answer» Because: ◆Banks are not present everywhere in rural areas. ◆Even when they are present, getting a loan from the bank is much more difficult than taking loan from informal sources. ◆Mega banks or public sector banks require proper documents. ◆Absence of collateral is one of the major reasons which prevent poor from getting loans. ◆Informal lenders know the borrowers personally and they are willing to give a loan wihout collateral.

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