Poor people usually depend on ____ sources of credit:

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Detailed Solution

Poor people usually depend on informal sources of credit. A large number of poor households in India are dependent on informal sources for meeting their credit requirements. That’s because there are not adequate numbers of formal institutions like banks and cooperatives in rural areas. It is much more convenient for rural, poor populations to access informal sources than formal ones. Also, there are a lot of legal formalities in the formal sector which provide loans only for productive purposes.
On the other hand, informal sources do not require many legalities and provide loans on easy terms for both productive and non-productive purposes.

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