Question

Distinguish between banks and moneylender on the basis of (i) Entity; (ii) Security; (iii) Activity; and (iv) Clients

Answer 1

Answer:

Explanation:

banks

(i) Entity: It is an organization a firm with employees. A bank has the duty of performing financial transactions and facilitates clients , one of their ways of facilitating being, by giving loans to customers. They charge interest on it.

(ii) Security: Banks in order to give loans demand security, also known as collateral. They keep this because they will use that asset in case the money isn't returned.

(iii) Activity: Bank looks at activities of the person who wants to take a loan. Paper work is done so that he bank knows the business plans of the person taking money. Will he be able to give it back or not.

(iv) Clients: They create clients by giving them loans.

Money lenders

(i) Entity: They may be direct people or an organization. Money lender me be a friend or family even.

(ii) Security: Sometimes there is and sometimes there isn't.

(iii) Activity: The lender can ask around but at times paper work and background checks is not done.

(iv) Clients: This may happen for organization not for people who take loans from friends and family.

moneylender