(i) Poor households share of formal credit in urban areas is low as compared to that of rich households due to the following reasons : (a) Poors generally lack in collateral guaranters and do not have proper mode of repayment. (b) Informal sources of credit are generally flexible in timings, rate of interest, repayment schedule etc. Therefore, it is easier for poors to approach moneylenders as they know them personally. (ii) (a) Poors are not able to satisfy general terms of credit mostly collateral guarantees. (b) Informal moneylenders know the boor borrowers personally and therefore flexible in terms of repayment schedule, amount and interest etc.