Percentage of formal sector in total credit in India in poor household is
  • a)
    15
  • b)
    20
  • c)
    70
  • d)
    80
Correct answer is option 'A'. Can you explain this answer?

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Answers

Thilak Urs
Dec 03, 2020
Poor households prefer informal credit rather than formal credit due to many reasons
-They feel flexible with informal lenders as they can get some more credit at anytime and can trust them
-They are mostly uneducated and they can't provide the required documents and they work for daily wages and they can't go for banks and spend all the day
Therefore, majority of poor households prefer to procure credit from informal sectors and only some of them take credits from formal lenders

Poor households prefer informal credit rather than formal credit due to many reasons-They feel flexible with informal lenders as they can get some more credit at anytime and can trust them-They are mostly uneducated and they can't provide the required documents and they work for daily wages and they can't go for banks and spend all the dayTherefore, majority of poor households prefer to procure credit from informal sectors and only some of them take credits from formal lenders
Poor households prefer informal credit rather than formal credit due to many reasons-They feel flexible with informal lenders as they can get some more credit at anytime and can trust them-They are mostly uneducated and they can't provide the required documents and they work for daily wages and they can't go for banks and spend all the dayTherefore, majority of poor households prefer to procure credit from informal sectors and only some of them take credits from formal lenders