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Question
The poor are usually rejected bank loans in the absence of _____.
The poor are usually rejected bank loans in the absence of _____.
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Solution
The correct option is B Collateral
Collateral is a type of a security taken by the banks from its customers. Collateral can be in the form of fixed deposit, property documents, etc. Rural farmers/marginal farmers/landless labourers occupy the majority of rural poor population and savings of rural poor is negligible.
Providing collateral to bank for borrowing loans is a big challenge for rural poor.
Thus banks usually reject loans to rural poor due to the non presence of collateral security by poor.
Collateral is a type of a security taken by the banks from its customers. Collateral can be in the form of fixed deposit, property documents, etc. Rural farmers/marginal farmers/landless labourers occupy the majority of rural poor population and savings of rural poor is negligible.
Providing collateral to bank for borrowing loans is a big challenge for rural poor.
Thus banks usually reject loans to rural poor due to the non presence of collateral security by poor.
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