Banks require proper and legal documentations and collateral as security against loans. The borrowers who have not repaid previous loans, the banks might not be willing to lend them further. Those entrepreneurs, who are going to invest in a business with high risks, the might not be willing to lendRead more
Banks require proper and legal documentations and collateral as security against loans. The borrowers who have not repaid previous loans, the banks might not be willing to lend them further.
Those entrepreneurs, who are going to invest in a business with high risks, the might not be willing to lend money.
Merits Helps to meet the working capital needs of production. Helps in completing production on time. Low interest rate. Helps in increasing earnings. Demerits Difficulty in obtaining loans. Collateral issues. Documentation could be a problematic issue for few. For more answers visit to website: httRead more
Merits
Helps to meet the working capital needs of production.
Helps in completing production on time.
Low interest rate.
Helps in increasing earnings.
Demerits
Difficulty in obtaining loans.
Collateral issues.
Documentation could be a problematic issue for few.
1. Failure of the crop makes loan repayment impossible. 2. Downfall of crop prices also makes loan repayment impossible. 3. Higher interest makes life difficult. Credit in such a condition pushes the borrowers into a situation from which recovery is painful and they get into the debt trap. FoRead more
1. Failure of the crop makes loan repayment impossible. 2. Downfall of crop prices also makes loan repayment impossible. 3. Higher interest makes life difficult. Credit in such a condition pushes the borrowers into a situation from which recovery is painful and they get into the debt trap.
Lenders may demand collateral or an asset that the borrower owns to use it as a guarantee until he repays the loan. It may be sold if the borrower is not able repaid. For more answers visit to website: https://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
Lenders may demand collateral or an asset that the borrower owns to use it as a guarantee until he repays the loan. It may be sold if the borrower is not able repaid.
Informal lenders charge very high interest on their loans. There are no boundaries and restrictions. In certain cases, the high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrowers. This could lead to increasing debt trap, therefore the creditRead more
Informal lenders charge very high interest on their loans.
There are no boundaries and restrictions.
In certain cases, the high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrowers.
This could lead to increasing debt trap, therefore the credit activities of the informal sector should be discouraged.
What are the reasons why the banks might not be willing to lend to certain borrowers?
Banks require proper and legal documentations and collateral as security against loans. The borrowers who have not repaid previous loans, the banks might not be willing to lend them further. Those entrepreneurs, who are going to invest in a business with high risks, the might not be willing to lendRead more
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
Review any three merits and any two demerits of ‘formal sector of credits’ in India.
Merits Helps to meet the working capital needs of production. Helps in completing production on time. Low interest rate. Helps in increasing earnings. Demerits Difficulty in obtaining loans. Collateral issues. Documentation could be a problematic issue for few. For more answers visit to website: httRead more
Merits
Demerits
For more answers visit to website:
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How do farmers gets into debts trap?
1. Failure of the crop makes loan repayment impossible. 2. Downfall of crop prices also makes loan repayment impossible. 3. Higher interest makes life difficult. Credit in such a condition pushes the borrowers into a situation from which recovery is painful and they get into the debt trap. FoRead more
1. Failure of the crop makes loan repayment impossible.
2. Downfall of crop prices also makes loan repayment impossible.
3. Higher interest makes life difficult. Credit in such a condition pushes the borrowers into a situation from which recovery is painful and they get into the debt trap.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
Why the formal or informal sector does asks for collateral?
Lenders may demand collateral or an asset that the borrower owns to use it as a guarantee until he repays the loan. It may be sold if the borrower is not able repaid. For more answers visit to website: https://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
Lenders may demand collateral or an asset that the borrower owns to use it as a guarantee until he repays the loan. It may be sold if the borrower is not able repaid.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
The credit activities of the informal sector should be discouraged. Support your statement with relevant arguments.
Informal lenders charge very high interest on their loans. There are no boundaries and restrictions. In certain cases, the high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrowers. This could lead to increasing debt trap, therefore the creditRead more
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/