Home › UP Board Class 10 › Economics › Money and Credit › Why do most rural households still rely on money…
Why do most rural households still rely on moneylenders?
ABanks charge higher interest than moneylenders
BBanks don't operate in rural areas at all
CMoneylenders give lower interest rates
DBanks demand collateral, paperwork and refuse small unsecured loans
Answer & Solution
Correct answer: D. Banks demand collateral, paperwork and refuse small unsecured loans
1. Banks require collateral, documentation and creditworthiness checks.
2. Many poor rural households lack collateral and paperwork.
3. Moneylenders offer quick, paperwork-free loans, but at very high interest.
_Source: NCERT Class 10 Understanding Economic Development, Ch 3 "Money and Credit"_
Related questions
A primary advantage of cheques over cash transactions isBank loans to farmers come under which category of formal lending?Higher rate of interest in informal lending is risky becauseMicrocredit through Self-Help Groups primarily benefitsWhich of these is NOT a function of modern money?Why is the share of formal credit lower for poorer households?Cooperative societies serving as lenders are common in'Debt-trap' refers to a situation where