Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.

Factors Influencing Manav’s Decision to Borrow from a Bank or Moneylender:
1. Interest Rates: Manav will check which option offers a lower interest rate for the loan. Banks generally have lower rates compared to moneylenders.

2. Terms and Conditions: Banks might provide more flexible repayment schedules and longer loan durations compared to moneylenders, which might have stricter terms and shorter repayment periods.

3. Collateral Requirement: Banks often ask for collateral (like property) for larger loans, while moneylenders might not. Manav will consider if he has assets to offer as collateral.

4. Credibility and Trust: Banks are regulated and more reliable institutions, offering transparent processes. Moneylenders might be less regulated, making their reliability questionable. Manav may prefer a more trustworthy option.

5. Credit History: Banks consider credit history, which might affect Manav’s chances of getting a loan. Moneylenders might be less concerned about this, making it easier for those with poor credit to borrow.

6. Speed of Loan Approval: Moneylenders might approve loans quicker than banks, offering faster access to funds. If Manav needs immediate money, he might choose a moneylender for quicker approval.

7. Customer Service: Banks usually offer more customer support and financial advice compared to moneylenders. Manav might consider this when making his decision.

Manav will consider these factors carefully to choose the option that suits his needs, whether it’s the lower interest rates from banks, more flexible terms, collateral availability, credibility, credit history flexibility, quick approval, or better customer service.