“Cheap and affordable credit is essential for poor households both in rural and urban areas’’. In the light of this statement explain the social and economic values attached to it.

Loan is an essential element that is involved in a poor household's families. Loans are taken to improve the standard of living, to afford the things which are costly, to attain a better health facility, procure the better agricultural equipment, etc. Loans help them to solve these common problems, but loans are received by paying an interest rate against it. The rate of interest must be small and affordable for the poor households so that they can pay back the loan amount with their incomes. When the interest rates are very high, then the credit becomes very expensive that poor households may not able to pay the amount with their small income.

Cheap loans will provide the opportunity to poor families to pursue higher education by educational loans, increase the production in agriculture by providing farmers loan, likewise, there are business loans, vehicle loans, gold loan, etc. These loans provide an opportunity for the poor people to procure the items which they cannot buy due to low income.