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.

Q.1:- 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.

Occupation Reason for Needing a Loan
Construction worker

Graduate student who is computer literate

Migrant labourer in Delhi

A person employed in government service

Household maid

Small trader

Auto rickshaw driver

A worker whose factory has closed down

 

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?

 

Answer:-

 

Occupation Reason for Needing a Loan
Construction worker

 

Graduate student who is computer literate

 

Migrant labourer in Delhi

 

A person employed in government service

 

Household maid

 

Small trader

 

Auto rickshaw driver

 

A worker whose factory has closed down

To meet a medical emergency in the family

 

To pay the fees for a higher degree

 

To purchase a flat

 

For expenses related to his daughter’s wedding

 

To meet the daily expenses

 

To run his business efficiently

 

To replace his old auto rickshaw with a new one

 

To meet his expenses till he gets employed again

 

Classification Regarding Ability to get a Loan

 

Those Who Might Get a Bank Loan Those Who Might Not Get a Bank Loan
Graduate student who is computer literate

 

A person employed in government service

 

Small trader

 

Auto rickshaw driver

Construction worker

 

 

Migrant labourer in Delhi

 

 

Household maid

 

A worker whose factory has closed down

 The criteria I have used for this classification are

(a) Does the borrower have the potential to repay the loan or not? People with a secure job or a running business will get a loan because they have the capability to repay the installments. Here the government servant and small trader will be successful, whereas the migrant labourer, household maid, construction worker and worker whose factory has closed down will not be successful.
(b) Whether the borrower is able to pledge collateral on which to guarantee the loan taken. Here the auto rickshaw driver can pledge his auto rickshaw to the bank and the graduate student can pledge any capital asset owned by him.
These two are the basic prerequisites for getting a loan from a bank.