why does the formal or informal sector ask for a collateral
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Answered by
46
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Collateral is asset (apartment, cars, house, etc.) which the borrower give as an security against the loan. In both sectors they ask for collateral so if the borrower don't have money to repay they can sell the collateral to get the money back.
Collateral is asset (apartment, cars, house, etc.) which the borrower give as an security against the loan. In both sectors they ask for collateral so if the borrower don't have money to repay they can sell the collateral to get the money back.
Answered by
17
Answer:
Collateral refers to any property or asset that is provided by a borrower to the lender for securing the loan. If the borrower fails to repay the loan on the due date, the lender has the right to seek his collateral to attain the required money.The banks or lenders demand collateral against the loans to keep as security.
Explanation:
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