Question

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

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

Answer 1

Answer: (C), (D)

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.