Which of the following is a primary reason that prevents the poor from getting bank loans?

see full answer

High-Paying Jobs That Even AI Can’t Replace — Through JEE/NEET

🎯 Hear from the experts why preparing for JEE/NEET today sets you up for future-proof, high-income careers tomorrow.

An Intiative by Sri Chaitanya

High interest rate

Lack of personal connection

Lack of proper documents

Absence of collateral

answer is D.

(Unlock A.I Detailed Solution for FREE)

Best Courses for You

JEE

NEET

Foundation JEE

Foundation NEET

CBSE

Detailed Solution

The absence of collateral is a primary reason that prevents the poor from getting bank loans.
The formal sector loan providers offer loans only if the person taking the loan has a property in the form of collateral. Collateral is a kind of security or mortgage which banks ask the borrower to keep against loans so that if the borrower fails to pay back the loan and interest on time, the bank can sell off this mortgaged property and recover the amount of loan from the same. But, unfortunately, the poor section of society has no property to be kept as collateral. As a result, the poor section of society prefers to take loans from the informal sector even after knowing that the latter charges more interest.

Watch 3-min video & get full concept clarity

Result Producing online coaching for JEE/NEET of south India

Largest All India Test Series for JEE/NEET

Best Online Course for IIT JEE

Best Online Course for NEET

Best Online Course for CBSE

Ready to Test Your Skills?

Check your Performance Today with our Free Mock Test used by Toppers!

Take Free Test

Get Expert Academic Guidance – Connect with a Counselor Today!

Result Producing online coaching for JEE/NEET of south India

Largest All India Test Series for JEE/NEET

Best Online Course for IIT JEE

Best Online Course for NEET

Best Online Course for CBSE