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प्रश्न
______ costs of borrowing increase the debt-burden.
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उत्तर
High costs of borrowing increase the debt-burden.
Explanation:
When interest rates or financing fees rise, a larger portion of each payment is used to service the interest rather than pay down the principal balance. This extends the time required to pay off the debt and dramatically raises the overall amount owing, putting further financial hardship on the borrower.
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संबंधित प्रश्न
Compare formal sector loans with informal sector of loans regarding interest only.
Which one of the following is a formal source of credit?
Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Explain.
Majority of the credit needs of the ______ households are met from informal sources.
The following table shows people in a variety of occupations in urban areas. What are the purposes for which the following people might need loans? Fill in the column.
| Occupations | Reason for needing a Loan |
| Construction worker | |
| Graduate student who is computer literate | |
| A person employed in government service | |
| Migrant labourer in Delhi | |
| Household maid | |
| Small trader | |
| Autorickshaw driver | |
| A worker whose factory has closed down |
Next, classify the people into two groups based on whom you think might get a bank loan and those who might not. What is the criterion that you have used for classification?
How can the problem of unemployment be eradicated in India? Explain any three ways.
“Credit can play a negative role.” Justify the statement with arguments.
Answer the following question.
Describe the importance of formal sources of credit in economic development.
Answer the following question.
Describe the bad effects of informal sources of credit on borrowers.
Answer the following question.
Give any two examples of the informal sector of credit.
