Question

Describe the importance of formal sources of credit

Answer 1

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Answer 2

Answer:

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The formal sector of credit plays a vital role in the economic development of a country.

1. It provides loans to people at low rate of interest which is people friendly.
2. As they get loans at low interest, they have less chance to be debt trapped.
3. These loans are regulated by the the govt. by following rules.
4. Due to above mentioned benefits, it is less burden to borrowers and create a scope for their development and economic development as well.