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in Class X Social Science by (-3,980 points)
“Most of the poor households still depend on the informal sector for loans,both in rural and urban areas of India”. Support the statement with three examples.

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2 Answers

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(i) Banks are not present everywhere in rural India. Even when they are present, getting a loan from a bank is much more difficult than taking a loan from informal sources.
(ii) Bank loans require proper document and collateral. Absence of collateral is one of the major reasons which prevents the poor from getting bank loans.
(iii) Informal lenders such as moneylenders, on the other hand, know the borrowers personally and hence are often willing to give a loan without collateral. The borrowers can, if necessary, approach the moneylenders even
without repaying their earlier loans.
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by Basic (25 points)
i) Lack of nearby bank facilities
ii) Lack of collateral
iii) Lack of education(no knowledge about documentations)
iv) Lack of awareness among rural people about new govt. policies related to loan services

Hope it helps you(^‿^✿)

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