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प्रश्न
Answer the following question.
Explain the importance of 'collateral'.
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उत्तर
Collateral refers to an asset that a borrower uses as a guarantee to secure a loan. The lender has the right to sell the collateral to obtain payment in case the borrower defaults on the loan and fails to pay it.
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संबंधित प्रश्न
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In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
Why might banks be unwilling to lend to small farmers?
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