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Q.

Majority of the credit needs of the poor are met from ____ sources of credit.


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Detailed Solution

The majority of the credit needs of the poor are met from informal sources of credit.
Informal sources are suitable for poor households as they do not have to follow certain kinds of procedures and various types of documentation. It consists of moneylenders, traders, rich employers, landowners, etc. They provide loans at a very high-interest rate, which is very expensive for the borrowers. They usually exploit people by charging a very high interest rate and can also opt for unfair means to get their payment back.
 
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