Why it is difficult to poor to get loans from the bank
sejuu:
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Answers
Answered by
48
Banks requires proper documentation and collateral for providing loans. This prevents the poor
from getting loans from the banks
from getting loans from the banks
Answered by
11
It is a misconception to say that
poor people can not get loan from banks. Banks consider loans based on
viability of the scheme for which the loan is sought, technical
feasibility, economic viability, character/capacity/credit worthiness of
the applicant etc. As a matter of fact, certain loan facilities and
schemes are exclusively reserved for poor people. For example, loans
under DIR(Differential Interest Rate) Scheme in which very low income
group applicants alone can be considered and for such loans the
prescribed rate of interest is a meager 4% simple interest. And banks
are required to release loans under the DIR scheme at not less than 1%
of their loans. Further all loans sponsored by the Government (where the
Government provides subsidy) are given to people who are poor and
economically underprivileged. Moreover sizeable part of loans given by
banks under “priority sector advances” viz agricultural finance, small
industries finance, small business finance etc are utilised by
economically poor section of the society. Besides most of the education
loans are utilised by students belonging to the economically
disadvantaged section of the society. It is mandatory for banks to give
loans for the priority sector at not less than say 40% of their loans
and advances. Hence, it would not be fair to say that poor people are
not getting loans from the banks.
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