Compare formal sector loans with an informal sector of loans regarding interest only.(Delhi - 2016)
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Formal Sector Loans: Include loans from banks and cooperatives. ... (ii) Formal sector strictly follows the terms of credit, which includes interest rate, collateral, documentation and the mode of repayment. Informal Sector Loans: Include loans from moneylenders, traders, employers, relatives, friends, etc.
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Informal Sector Loans : Include loans from moneylenders, traders, employers, relatives, friends, etc. Features for informal sector loans are: (i) Their credit activities are not governed by any organisation, therefore they charge higher rate of interest.
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