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s/What do you mean by debt trap? |
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Answer» Debt trap is the situation in which the loan taken by the borrower creates a situation from which it is very painful and difficult to get out of it. to pay the credit another loan is taken which puts more pressure on the borrower and he is trapped and loses his collaterals which he has given as the security to the sector he is borrowing money. For example:If a farmer gets loan from a moneylender to buy equipments seeds etc and decides to pay it back after harvest. Due to some reason the harvest goes bad and he is unable to repay the loan thus he falls into debt trap. simply it is a trap which is organised by lender to the borrower in order of his benefit |
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