in world wide how subprime lending happens?

Question

what is actually sub prime lending means? how it works? the reason for sub prime lending? what is the effects of foreign direct investment and foreign institutional investment on sub prime lending? how it effects our economy?

Answer 1

"Prime" customers are customers with the best credit. Therefore, sub-prime means all others. Why lend to them? They know they don't qualify for regular credit, so they are willing to pay higher interest rates.