Question

why does the formal or informal sector ask for a collateral? Why do banks or lenders demand collateral against loan​

Answer 1

Answer:

formal or informal sector ask for a Collateral because if the person refuses to pay the loan than they used to put his collateral at their on to complete the the fee of the loan Bank also demands the collaterals from the lenders because many people are not able to submit the loan due to time so they put collateral