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Question
Explain, why the banks do not lend credit to certain borrowers.
Solution
- Banks require proper documents and collateral as security against loans before sanctioning the loan; however, some people fail to meet these requirements.
- Banks require proper documents and collateral as security against loans before sanctioning the loan. however, some people fail to meet these requirements.
- Banks may refuse to lend to entrepreneurs who want to invest in high-risk businesses.
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RELATED QUESTIONS
Which one of the following is NOT an informal sector loans for poor rural household in India?
Sometimes lenders demand against loan ______.
Most of the informal lenders charge ______.
The difference between what is charged from borrowers and what is paid to depositors is ______.
An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment is called ______.
How do Self Help Groups help borrowers to overcome the problem of lack of collateral? Explain.
Read the information given below and select the correct option.
Rohan has taken a loan of Rs.5 lakhs from the bank to purchase a house at a 12% rate of interest. He has to submit papers about the new house and salary records to the bank. What is this process called?
Explain any three terms of Credit.
Assertion (A): Banks are not ready to lend money to certain borrowers.
Reason (R): Some people do not have collateral.
Read the given source and answer the questions that follow:
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Loans from Cooperatives Besides banks, the other major source of cheap credit in rural areas are the cooperative societies (or cooperatives). Members of a cooperative pool their resources for cooperation in certain areas. There are several types of cooperatives possible such as farmers cooperatives, weavers cooperatives and industrial workers cooperatives, etc. Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. It accepts deposits from its members. With these deposits as collateral, the Cooperative has obtained a large loan from the bank. These funds are used to provide loans to members. Once these loans are repaid, another round of lending can take place. Krishak Cooperative provides loans for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses. |
- 'Cooperative society' is an example of which source of 'credit'? (1)
- Explain the contribution of Cooperative Societies in rural development. (1)
- Mention any two sources of capital for Self-Help Groups. (2)
