Question

compare and contrast the condition for taking loan from formal and informal sources.

Answer 1

Hey mate here is your answer

Formal source
1. includes bank and cooperative
2. the Reserve Bank of India supervises The functioning of the formal sources of loans
3 charges a low interest rate
4. cannot use unfair means
5. borrowers have larger income left for themselves.

Informal sources
1 includes money lenders, traders, employees comma relatives and friends etc.
2. there is no organisation which supervisors the correct carrot activities of lenders in the informal sector .
3 charges very high interest rates
4 there is no one to stop them from using unfair means to that their money back
5. borrowers have less income left for themselves.

Hope it will help you
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Answer 2

Hey mate ^_^

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Answer:
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___________
Formal sector:-
___________

=> Includes banks and cooperatives.

=> The Reserve Bank of India supervises the functioning of formal sources of loans.

=> Charges a low interest rate.

=> Cannot use unfair means.

=> Borrowers have larger income left for themselves.

____________
Informal sector:-
____________

=> Includes moneylenders, traders, employers, relatives and friends, etc.

=> There is no organisation which supervises the credit activities of lenders in the informal sector.

=> Charges very high interest rates.

=> There is no one to stop them from using unfair means to get their money back.

=> Borrowers have less income left for themselves.

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NOTE:-
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=> For the rural poor, only formal sources of credit are deemed best but for the purpose the banks and co operatives have to expand their reach in the rural areas.

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