What is the meaning of the term 'collateral' in the context of the banking system?
1
Collateral is an asset that a borrower owns and uses this as a guarantee to a lender until the loan is repaid.
2
Collateral is an asset that the government provides to farmers.
3
Collateral is an asset that a borrower took as a loan.
4
More than one of the above
5
None of the above