Question

The following table shows people in a variety of occupations in urban areas. What are the purposes for which the following people might need loans? Fill in the column.

Occupations	Reason for needing a Loan
Construction worker	-
Graduate student who is computer literate	-
A person employed in government service	-
Migrant labourer in Delhi	-
Household maid	-
Small trader	-
Autorickshaw driver	-
A worker whose factory has closed down	-

Next, classify the people into two groups based on whom you think might get a bank loan and those who might not. What is the criterion that you have used for classification?

Answer 1

Occupations	Reason for needing a Loan
Construction worker	To meet living expenses
Graduate student who is computer literate	To pursue higher education
A person employed in government service	For an offspring’s wedding
Migrant labourer in Delhi	To buy a house
Household maid	To meet living expenses
Small trader	To buy new machinery
Autorickshaw driver	To buy an autorickshaw
A worker whose factory has closed down	To meet living expenditure while still unemployed

 

 

Those who might get a bank loan	Those who might not get a bank loan
Graduate student	Construction worker
A person employed in government service	Migrant labourer in Delhi
Small trader	Household maid
Autorickshaw driver	A worker whose factory has closed down

The criterion I have used for the aforementioned classification is first, whether the borrower has the potential to repay the loan or not. Those with job security will certainly get a loan because they have the capability to give repayment instalments. The second basis of classification is whether the borrower has collateral or not, on which to guarantee his/her loan. These two are the basic prerequisites for getting a loan from a bank.