Question

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Answer the following questions:
A number of borrowers have no collateral to pledge against loans, particularly small farmers requiring crop
loans. A collateral is an asset that the burrower owns and pledges as a guarantee to the lender until the loan is
repaid. Repayment of such a loan is crucially dependent on the income from selling the crop. Since there is a
risk involved in case the crop yield is inadequate for any reason), banks are not willing to lend to such
borrowers who cannot pledge collateral, which can be sold to recover the loan amount in case of default in playing the loan amount.​

Answer 1

Answer:

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Explanation:

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