AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
Most farmers and labourers lack collateral (assets as guarantee) required by banks, making them ineligible for formal bank loans for cultivation.
Source: Money and Credit, Self-Help Groups for the Poor section
The passage explicitly states: "Absence of collateral is one of the major reasons which prevents the poor from getting bank loans." Examiners expect the keyword collateral in the answer. One crisp line is sufficient for 1 mark.