12. Which is not true about loan taken from informal and formal sources in India- 85 % of the loans taken by poor households in the urban areas are from informal sources. 90 % of the loans taken by rich households in the urban areas are from formal sources. 72 % of the loans taken by well-off households in the urban areas are from formal sources. 53 % of the loans taken by households with few assets in the urban areas are from informal sources.
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Explanation:
Correct option is D)
Majority of the people in rural areas depend on informal sources for loans.
Informal sources include landlords and rich farmers.
The main reasons behind this are:
1. The number of banks in rural remote areas is low.
2. Bank loans require proper documents and collateral (security). Absence of collateral is one of the major reasons which prevents the poor from getting bank loans.
3. Informal lenders like landlords, know the borrower personally and hence, are often willing to give a loan without a security.
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