Question

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?

Answer 1

Occupations	Reason for needing a Loan
Construction worker	To meet living expenses
Graduate student who is computer literate	To pursue higher education
A person employed in government service	For an offspring’s wedding
Migrant labourer in Delhi	To buy a house
Household maid	To meet living expenses
Small trader	To buy new machinery
Autorickshaw driver	To buy an autorickshaw
A worker whose factory has closed down	To meet living expenses while still unemployed

Those who might get a bank loan	Those who might not get a bank loan
Graduate student	Construction worker
A person employed in government service	Migrant labourer in Delhi
Small trader	Household maid
Autorickshaw driver	A worker whose factory has closed down

The criterion I used for the aforementioned classification is whether the borrower has the ability to repay the loan. Those who have job stability will almost surely be able to obtain a loan because they can make monthly payments. The second foundation for classification is whether or not the borrower has collateral to guarantee his or her loan. These are the two most basic requirements for obtaining a bank loan.