economicsRural people depend more on ____ lenders.

Rural people depend more on ____ lenders.


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    Solution:

    Rural people depend more on informal lenders.
    Rural people mostly require loans to purchase agricultural inputs and start small businesses. Formal credit institutions like banks require the fulfilment of credit terms for lending a loan. Terms of credit include interest rate, mode of repayment, documentation process, and collateral. But rural people are not much aware of the documentation process, and poor borrowers do not possess any collateral. So, rural people prefer to take loans from moneylenders and traders who do not require any collateral for lending loans. But money lenders charge high-interest rates, do not maintain proper transaction records, and use unfair means to retrieve the loan amount from the borrowers.
     
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