Question

(1) What is formal and informal sector credit ?
(2) How much percentage of rural credit purchase from formal sector ?​

Answer 1

Answer:

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Explanation:

1) The credit activities of the formal sector are supervised by the Reserve Bank of India. The RBI gives credit to all at low interest rates. In the informal sector there is no supervisory body. ... A high rate of interest means that a borrower spends more money to repay the loan and is left with less money for himself.

2) Loans that are given by banks and co-operative institutions are called Formal sector of credit loans.

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Answer 2

Answer:

1)Landlords, moneylenders, traders, relatives, friends and other sources ofcredit constitute the informal sector ofcredit. ... The credit activities of theformal sector are supervised by the Reserve Bank of India. The RBI givescredit to all at low interest rates. In theinformal sector there is no supervisory body.