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Why do you think that the share of forma...

Why do you think that the share of formal sector credit is higher for the richer households compared to the poorer households?

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The share of formal sector credit is undoubtedly higher for the richer household compared to the poorer household because formal sector requires proper documents and collateral as security against loan. Poor people are illiterate, so they lack in providing such things which affect their capacity to borrow.
Secondly, they do not repay the loan on time. Thus, the formal sector is unwilling to lend to poor household.
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