Loans without collateral are cheaper and easier to service. They are usually advanced to individuals with a sound business plan in the form of capital goods like cows or processing machines. The loanee services the loan from the proceeds of the investment. The risk of failure is low since the lending agency sends assessors to determine the viability of the business. Have you ever used such facilities? In case of non performance, the loanee does not suffer financial shock when the capital good advanced is repossessed.