nd affordable credit is crucial for the country's development due to the following factors: 1. More lending would lead to higher incomes and encourage people to GROW crops, do business and set up small SCALE industries. 2. Cheap credit means more income is left with the borrower to reinvest rather than return as interest. This leads to ACCELERATION of economic activity. 3. Cheap credit would also allow weaker sections of society to enter formal sector of lending and rid them of exploitation. 4. Affordable credit would also end the cycle of debt trap and lead to sustainable economic activity that would allow borrowers to invest in better technology to make their business more competitive. informal lenders CHARGE a much higger interest rate on loans.so de cost to the borrower of in4mal lender is much higher higher cost of borrowing means larger part of de earnings of the borrowers is used to repay the loan.so borrowers have less income left 4 themselves sometimes high interest rate 4 borrowing means that de amont 2 b repaid is greater than de income of the borrower.this could lead to increasing dept also people who wish 2 start an enterprise with borrowing may not do so bczz of high cost of borrowing 4 these reasons banks and cooperative societies need to lent more.this would lead to higher incomes and many people could then BORROW cheaply 4 a variety of needs . thy cld grw crops ,do business etc. hence, for these reasons ,cheap and affordable credit is crucial 4 de countries development