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Question

Why do small traders prefer borrowing money from self-help groups than borrowing from moneylenders?

A
Self-help groups charge high interest.
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B
Moneylenders charge less interest.
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C
Self-help groups charge less interest.
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D
Moneylenders charge high interest.
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Solution

The correct options are
C Self-help groups charge less interest.
D Moneylenders charge high interest.
Small traders prefer borrowing money from self-help groups than from moneylenders because moneylenders charge high rates of interest. For instance, in self-help groups, small traders pay 25 paisa as interest for 100 rupees whereas moneylenders charge 3 rupees as interest for 100 rupees.

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