Which of the following is/are correct? 1. Collateral requirements expand the credit access for landless labourers. 2. Multinational Corporation may influence the domestic production patterns. Select the answer using the codes given below:

Collateral

• Collateral is an asset such as land, building, vehicle or deposits that the borrower owns and uses as a guarantee to the lender until the loan is repaid.
• Since landless labourers and the poor do not possess such assets, the requirement of collateral excludes them from formal credit and pushes them towards moneylenders. It therefore restricts and does not expand their access to credit. Hence, statement 1 is incorrect.

Multinational Corporations

• MNCs set up production units in countries where labour and other costs are low and markets are large, and they buy up local companies, place orders with local producers and control the technology and the terms of production.
• Through such investment, outsourcing and competition they influence what is produced in the host country and how it is produced. Hence, statement 2 is correct.