what is the role of money lender
Answers
The main function of moneylenders is to give short-term loans. ... (6) Since the moneylenders have a personal knowledge about the creditworthiness of borrowers they adopt rigid or flexible attitude while lending, charging interest, and recovery of loans. (7) They charge excessively high rates of interest.
Answer:
the act or occupation of lending money at interest. PLS mark me brainlist
Explanation:
They are classified into two categories:
a) Professional, and
(b) Non-professional.
The professional moneylenders are those whose primary business is moneylending. On the other hand, the non-professional moneylenders are those who are engaged in some other profession but whose side business is moneylending.
They include landlords, agriculturists, merchants, traders, rich widows, pensioners, advocates, teachers, or any other person who has got surplus money. The professional and non-professional money lenders operate both in rural and urban areas. But this division is not water-tight because an urban merchant may also lend to a farmer whose produce he buys.
(1) The main function of moneylenders is to give short-term loans. Loans may be given for consumption purposes, to meet social and religious obligations or the needs of farmers for seeds, cattle, fertilisers, etc.
(2) Loans are generally given on the personal security of borrowers. However, grant of loans on the security of costly things in urban areas and against land or crop in rural areas; is also common.
(3) They have personal contacts with the borrowers who approach them directly and informally,
(4) The moneylenders normally lend their own funds.
(5) The non-professional moneylenders prefer to lend in kind.
(6) Since the moneylenders have a personal knowledge about the creditworthiness of borrowers they adopt rigid or flexible attitude while lending, charging interest, and recovery of loans.
(7) They charge excessively high rates of interest.
(8) The moneylenders in rural areas are quite influential persons who adopt pressure tactics in the recovery of loans, such as forcible occupation of the cultivator’s land, caste disapproval, pressure from panchayats, etc.
(9) The moneylenders also resort to some malpractices in rural areas which are: manipulating accounts, deducting interest in advance, demanding presents, exacting free services from the borrower, demanding donations, obtaining thumb impression of borrower on blank paper, non-issue of receipts for payment of interest and principal, keeping the deed of land or house of the borrower as a security, forcing the borrower- farmer to sell his produce in advance at a price lower than the market, etc.