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“Poor households still depend on informal sources of credit.” Support the statement with examples.

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Poor households still depend on informal sources of credit because:

Bank loans require proper documentation and collateral which is rarely available with poor households.

Informal sources of credit such as moneylenders know the borrowers personally and are often willing to give a loan without a collateral.

Sometimes, if the borrowers are unable to return the loan, they can get additional loans from moneylenders.
by Basic (50 points)
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by Basic (50 points)

Bank loans require proper documentation and collateral which is rarely available with poor households.

Informal sources of credit such as moneylenders know the borrowers personally and are often willing to give a loan without a collateral.

Sometimes, if the borrowers are unable to return the loan, they can get additional loans from moneylenders.

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