Given that a large number of people in our country are poor, does it in any way affect their capacity to borrow?


A large number of people in our country are poor and yes it affects the capacity to borrow in many ways. As we discussed in above question about collateral and we all know that only the person who has money will have assets or collateral to keep as mortgage. But if the whole residents are poor then no one will be able to borrow as they don’t have capacity to keep any mortgage or even borrow a penny from the bank. They mostly borrow from informal sectors like moneylenders, relatives and friends if the needed it.


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