Credit for country development: (i) Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan. Hence, borrowers have less income left for themselves. (ii) In certain cases, the high interest rate of borrowing can mean that the amount to be repaid is greater than the income of the borrower. This could lead to increasing debt and debt trap. For these reasons, banks and co-operative societies need to lend more. (iii) This would lead to higher incomes and many people could then borrow cheaply for a variety of needs. (iv) They could grow crops, do business, Set-up small-scale industries, etc. (v) They could Set-up new industries or trade goods.