economicsRead the information and answer the question Sunita owns a small flower shop near a temple she wants to expand her shop by keeping exoticflowers and flower bouquets. To whom she should approach for a very short term credit?

Read the information and answer the question


Sunita owns a small flower shop near a temple she wants to expand her shop by keeping exotic


flowers and flower bouquets. To whom she should approach for a very short term credit?


  1. A
    Moneylenders as they provide short-term credit.
  2. B
    Banks as they charge low interest
  3. C
    Cooperatives as they do not require collateral.
  4. D
    None of these  

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    Solution:

    Sunita can take short-term credit from a cooperative as they provide loans at a cheaper interest rate and do not require collateral. A collateral is a borrower-owned asset, such as property, a building, or a plot of land, that serves as a guarantee to the lender against the loans. Poor people do not rely on formal sources of credit like banks as they do not possess any collateral and have no knowledge about the completion of the documentation process. Cooperatives accept deposits, which are small savings kept by the members.
     
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