What is a debt-trap?
Aug 29, 05:08

A debt-trap, as name suggests, is usually when an individual or an entity is unable to repay a debt. Thus, the borrower is either forced to borrow fresh loans to service the original debt or risk a default. For example, those who do not repay their credit card bills on time have interest payments pile up and add to their burden, which eventually lands them in a debt-trap. Even sovereign countries are prone to similar traps. For example, countries including Sri Lanka and Pakistan recently were caught in one, when the two countries struggled to repay their borrowing, mostly extended by China.

Who's prone to debt-traps