10th Class Social Science Money and Credit Question Bank 10th CBSE Social Science Money and Credit

  • question_answer   Explain the term debt-trap. Why is it more rampant in rural areas? Give two reasons.

    Answer:

                      Debt-trap is a situation in which a person after taking a loan is not able to pay back the loan. It is more common in rural areas because (i) A borrower repays a loan by selling the agricultural produce, Which sometimes may not be enough to repay the loan. (ii) Rural borrowers normally depend on informal sources of credit who charge a high rate of interest. This repayment of larger amounts may sometimes be larger than their income.


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