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A shanty town is a spontaneous settlement. They are built on land which no one else wants. Often on hill side liable to land slides. They are built out of junk materials that people find. They are over crowded.
They are illiterate because they do not live in legal housing . Which means there are no schools near by. They do get free education till they are 16 but some cannot get there. The schools are to far away and they can not afford to get transport into the school.