Question

You might also find that those who take a loan for starting self-employment activities but use it for other purposes. Interact with a few such borrowers. Identify the reasons for not starting self-employment activities and discuss in the classroom.

Answer 1

Some people take loans to start self-employment activities, but later use the money for other purposes because of various difficulties.

Possible reasons for not starting self-employment are as follows:

• Lack of proper business knowledge or skills.
• Fear of loss or failure.
• Insufficient loan amount to start the activity.
• Lack of suitable market for selling the product.
• High cost of raw materials and equipment.
• Family emergencies such as illness, education or marriage expenses.
• Lack of guidance and training.
• Difficulty in getting licences, workspace or other facilities.
• Uncertainty about regular income from self-employment.

Conclusion:

To encourage self-employment, borrowers should receive proper training, guidance, adequate credit, market support, and follow-up assistance so loans are used for productive purposes.