‘Cheap and affordable credit is essential for poor households both in rural and urban areas’. In the light of the above statement, explain the social and economic values attached to it.
Credit means loans. It refers to a sort of agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future repayment.
i. Cheap and affordable credit for poor households is essential for a country’s economic development and material growth. It is required for a variety of important economic activities such as big or small investments, setting up of businesses and buying of cars and houses.
ii. In the rural hinterland, credit helps in the development of agriculture by helping farmers purchase seeds, fertilisers, pesticides and farming machinery.
iii. Some people may also avail of credit to provide for marriage or illness.
