difference between formal and informal source of creadit>
Answers
a)
Loans that are given by banks and co-operative
institutions are called Formal sector of credit.
b)
The functioning of these banks and co-operative
institutions are supervised by Reserve Bank of India – RBI.
c)
These institutions are required to report to
the RBI the rate of interest, amount lending, etc.
d)
Borrower is required to submit collaterals and
documents.
Informal source of credit:
a)
Loans that are given by money lenders, friends
and relatives are called Informal source of credit.
b)
They are not supervised by Reserve Bank of
India – RBI.
c)
They can lend money at any interest rate and
use any means to get back their money.
d)
Borrower is not required to submit collaterals
and documents.
hope it's help u
Answer:
Answer:
Formal source of credit:
(a) Loans that are given by banks and co-operative institutions are called Formal sector of credit.
(b) The functioning of these banks and co-operative institutions are supervised by Reserve Bank of India- RBI.
(c) These institutions are required to report to the RBI the rate of interest, amount lending, etc.
(d) Borrower is required to submit collaterals and documents.
Informal source of credit:
(a) Loans that are given by money lenders, friends and relatives are called Informal source of credit.
(b) They are not supervised by Reserve Bank of India - RBI.
(c) They can lend money at any interest rate and use any means to get back their money.
(d) Borrower is not required to submit collaterals and documents
Explanation: