Question

Why is it not easy to get loans from the formal sector? Read the following reasons and choose the most appropriate option:

1. Availability of Banks
2. Availability of Collateral
3. Long and Complicated Loan Process
4. Awareness of Borrower

Options

• Only I, II and III are correct.

• Only II, III and IV are correct.

• Only I, II and IV are correct.

• Only I, III and IV are correct.

Answer 1

Only II, III and IV are correct.

Explanation:

Banks are official sources of credit, and the question is about why loans from such entities are difficult to obtain. Thus, the availability of banks is an inappropriate alternative. All other choices contribute to the difficulties of obtaining bank loans.