The following table shows people in a variety of occupations in urban areas. What are the purposes for which the following people might need loans? Fill in the column.
Correct fill the given table is as follows:
Occupations | Reason for needing a Loan |
Construction worker | To meet living expenses |
Graduate student who is computer literate | To pursue higher education |
A person employed in government service | For his/her daughter’s wedding |
Migrant labourer in Delhi | To buy a house |
Household maid | To meet living expenses |
Small trader | To buy new machinery |
Auto rickshaw driver | To buy a new auto rickshaw |
A worker whose factory has closed down | To meet living expenditure while still unemployed |
Next, classify the people into two groups based on whom you think might get a bank loan and those who might not. What is the criterion that you have used for classification?
Those who might get a bank loan | Those who might not get a bank loan |
Graduate student | Construction worker |
A person employed in government service | Migrant labourer in Delhi |
Small trader | Household maid |
Auto-rickshaw driver | A worker whose factory has closed down |
The criterion which is used to categorize the above mentioned things, that first to check whether the borrower has the potential to repay the loan or not. And with job security they will certainly get a loan from bank because they have the capability of paying the debts in installments. The second basis is that whether the borrower has collateral or not and on what guarantee he will be lent. These two are the basic prerequisites for getting a loan from a bank.