what are the reasons that the banks are not willing to lend certain borrowers
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Cause 'Bank' loans require appropriate documents and collateral. Absence of collateral is one of the major reasons why the banks might not be 'willing to lend to certain borrowers'. The 'borrowers' who have not paid any previous loans are defaulters, and banks might not be 'willing to lend' them again.
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Banks might not be willing to lend to people who
have no collateralhave no salary slips or tax returnscannot furnish documents of employmenthave no person to stand as suretydo business which involves high riskhave a history of non-repayment of loan
In such cases, banks do not have a guarantee as to whether or not the loans will be repaid by the persons concerned. It has to be understood that banks only mediate between those who have surplus money and those who need money. Banks in fact borrow the money deposited with them, and lend it out to persons requiring money. They would thus be unwilling to advance the money to individuals from whom repayment is uncertain.
have no collateralhave no salary slips or tax returnscannot furnish documents of employmenthave no person to stand as suretydo business which involves high riskhave a history of non-repayment of loan
In such cases, banks do not have a guarantee as to whether or not the loans will be repaid by the persons concerned. It has to be understood that banks only mediate between those who have surplus money and those who need money. Banks in fact borrow the money deposited with them, and lend it out to persons requiring money. They would thus be unwilling to advance the money to individuals from whom repayment is uncertain.
Chanchal04:
2nd paragraph point mein likh liyo
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