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Question
How do Self Help Groups help borrowers to overcome the problem of lack of collateral? Explain.
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Solution
- People can get timely loans for a variety of purposes and at a reasonable interest rate.
- SHGs are regular in their savings which can be used as monetary help.
- Members can take small loans without collateral to meet their needs.
- Due to timely repayment banks also lend loans to SHGs.
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RELATED QUESTIONS
Sometimes lenders demand against loan ______.
Interest rate, security and documentation requirement, and the mode of repayment together comprise what is called the ______.
Most of the informal lenders charge ______.
An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment is called ______.
In rural areas, the main demand for credit is for ______.
Why do most of the rural households still remain dependent on the informal sources of credit? Explain.
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A House Loan Megha has taken a loan of 75 lakhs from the bank to purchase a house. The annual interest rate on the loan is 12 percent and the loan is to be repaid in 10 years in monthly instalments. Megha had to submit to the bank, documents showing her employment records and salary before the bank agreed to give her the loan. The bank retained as collateral the papers of the new house, which will be returned to Megha only when she repays the entire loan with interest. |
- From which source of credit Megha has taken loan?
- Explain the terms of credit given in the source.
Explain, why the banks do not lend credit to certain borrowers.
Explain any three terms of Credit.
Assertion (A): Banks are not ready to lend money to certain borrowers.
Reason (R): Some people do not have collateral.
