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

Yes, poverty significantly impacts borrowing capacity. It is because:

1. Poor individuals may lack valuable assets to offer as collateral, making it harder for them to access credit.
2. A good credit history is essential for borrowing. Poor people with limited financial transactions may lack a positive credit record.
3. Lenders assess borrowers’ ability to repay based on stable income sources.
4. Poor individuals may have limited access to formal banking services.