Distinguish between productive loan and unproductive loan
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The difference between the Productive loans and Unproductive loans is as follows:
- Any loan procured for agricultural production purposes is termed a productive loan, whereas, Loan which is taken for unproductive purposes is called an unproductive loan.
- The Productive loan is used for investment. Whereas, the Unproductive Loan is an expenditure.
- The Productive Loan generates revenue. Whereas, the Unproductive loan generate expense in the form of interest.
- An Example of a Productive loan is procuring a loan for acquiring a farm tractor. Whereas, an example of an Unproductive loan is procuring a loan for children's education.
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