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Why do the rural borrowers depend on the informal sector of credit |
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Answer» They don\'t have much knowledge to fulfill the bank\'s needs or formalities. Also don\'t have anything to keep as collateral. ... absence of collateral and documentation ..Absence of awareness among the people about the formal credit The rural borrowers depend on the informal sector for credit because :(i) Absense of collateral and documentation.(ii) Flexible loans in term of timelines, interest rates, procedural requirements etc. |
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