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Money and Credit
How does the use of money make it easier to exchange things? Give an example.
Money acts as medium of exchange as it facilitates exchange through a common medium i.e. currency. With money as a medium, the two components of a transaction namely, sale and purchase can be easily separated.
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Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
(a) Why might banks be unwilling to lend to small farmers?
(b) What are the other sources from which the small farmers can borrow?
(c) Explain with an example how the terms of credit can be unfavourable for the small farmer.Majority of the credit needs of the _________ households are met from informal sources.
_________ costs of borrowing increase the debt-burden.
_________ issues currency notes on behalf of the Central Government.
Banks charge a higher interest rate on loans than what they offer on ________.
_________ is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.
In a SHG most of the decisions regarding savings and loan activities are taken by:
Formal sources of credit does not include:
Why do we need to expand formal sources of credit in India?
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