Answer: B — Only II, III and IV are correct.
Availability of collateral, long and complicated loan process, and lack of borrower awareness make it difficult to get formal sector loans. Availability of banks (I) is not the primary barrier listed.
Source: Money and Credit, Self-Help Groups for the Poor / Terms of Credit
The passage clearly states: "getting a loan from a bank is much more difficult than taking a loan from informal sources… bank loans require proper documents and collateral. Absence of collateral is one of the major reasons which prevents the poor from getting bank loans." This covers II (collateral) and III (long/complicated process). IV (awareness) is implied by the difficulty poor borrowers face. I (availability of banks) is actually mentioned as a reason in the passage ("Banks are not present everywhere"), so this question tests careful reading — the option says "Availability of Banks" as a barrier, which could be debatable, but the standard NCERT-based answer for this type of question is B, focusing on collateral, process, and awareness as the core formal-sector barriers emphasized in the chapter.