Dependence on Informal Sector
Trending Questions
Q.
What is the difference between loan and cash credit?
Q.
What Are the Limitations of Credit Creation by Commercial Banks?
Q. Which of the following is the reason for encouraging cheap and affordable sources of credit?
- Profit for the banks
- Development of the country
- Development of the banks
- Profit for the government
Q.
_______________ is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.
Q.
Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.
Q. Why is there more inclination towards informal credit sources than banks?
- Banks have long queues.
- Banks have a tedious loan process.
- Banks demand a collateral.
- Banks are inaccessible in rural areas.
Q. Krish was not able to get a loan from the bank as he lacked collateral. However, his neighbour lent him the required amount even without a collateral. If informal loans are readily available, then why are they not recommended?
- Banks depend on loans for income
- Very high rates of interest
- Harassment of borrowers
- No records of transactions
Q. Radhe needs money. However, her bank would not give her a loan because she does not have a collateral. Suggest an alternate source of credit.
- Moneylenders
- Traders' union
- Cooperative
- Gram Sabha
