Advertisements
Advertisements
Question
Assertion (A): Banks are not ready to lend money to certain borrowers.
Reason (R): Some people do not have collateral.
Options
Both (A) and (R) are true, and (R) is the correct explanation of (A).
Both (A) and (R) are true, but (R) is not the correct explanation of (A).
A is true, but (R) is false.
A is false, but (R) is true.
Advertisements
Solution
Both (A) and (R) are true, and (R) is the correct explanation of (A).
Explanation:
Banks often require collateral as security for a loan. If a borrower does not have sufficient collateral, banks may perceive the loan as riskier and might be hesitant to lend. This is why the assertion that banks are not ready to lend money to certain borrowers is directly related to the reason that some people do not have collateral.
APPEARS IN
RELATED QUESTIONS
Which one of the following is NOT an informal sector loans for poor rural household in India?
Sometimes lenders demand against loan ______.
Interest rate, security and documentation requirement, and the mode of repayment together comprise what is called the ______.
The rich households are availing cheap credit from formal lenders whereas the poor households ______.
An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment is called ______.
Why do most of the rural households still remain dependent on the informal sources of credit? Explain.
How do Self Help Groups help borrowers to overcome the problem of lack of collateral? Explain.
Read the information given below and select the correct option.
Rohan has taken a loan of Rs.5 lakhs from the bank to purchase a house at a 12% rate of interest. He has to submit papers about the new house and salary records to the bank. What is this process called?
Explain, why the banks do not lend credit to certain borrowers.
Explain any three terms of Credit.
