Poor households still rely on which source for credit?

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Formal source of credit

Informal source of credit

Relatives or friends

All of these

answer is B.

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Detailed Solution

Poor households still rely on an informal source of credit. They rely on because of the following reasons:

There is a lack of facilities for banks in rural areas.

Some banks are established in rural areas, but taking credit from them is very difficult as it requires a lot of paperwork.

Formal sources do not provide loans to individuals without collateral. On the other hand, informal sources can provide loans to poor people without collateral as they know them personally.

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