Question

3 main difference between formal and informal sources of credit

Answer 1

Heyya!

FORMAL SOURCES OF CREDIT:
                            1.Includes banks and cooperatives.
​                             2.Requires collateral and documents.
                             3.Reasonable rate of interest is charged.
                             4.They have objective of  social welfare.
                             5.Terms of credit are fair and reasonable.
                            6.RBI supervises its functioning.

INFORMAL SOURCES OF CREDIT:
                            1.Includes moneylenders,traders,friends and relatives.
                           2.No collateral required.
                            3.Repeated borrowing can lead to debt trap.
                            4.Their only motive is to extract profit as much as possible.
                            5.Terms of credit are unreasonable.
                            6.Banks do not supervise.


Hope it helps! : )

Answer 2

Hii!!!!!!!!!
FORMAL SOURCE:

1.We need collateral security for taking loan.
2.The interest rate is very low.
3.Money collectors collect money without man-handling..

INFORMAL SOURCE:
1.There is no need of collateral.
2.Interest rate is very high
3.Money lenders collect money by doing man-handling or by doing the things which we loose prestige in society.

Hope it hlpzzzz.......