Question

difference between formal sector and informal sector.​

Answer 1

formal:-

1. this sector is mainly supervised by RBI
2. it inculde corporation and banks
3. in this collateral is required
4. it provide loan comparatively to lower price
5. it doesn't lead to dept trap

informal:-

1. no organisation to supervise this sector
2. they are mainly consist of money lenders friend and relative traders landowners etc.
3. collateral is not required
4. this sector charges higher interest rate
5. this could lead to death trap

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Answer 2

❛Answer ❜

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Formal sector ↓

✍︎ Supervised by R.B.I

✍︎ Fixed + Low interest Rate

✍︎ e.g. Banks

Informal sector ↓

✍︎ No organisation supervises these credit activities

✍︎ High + no fix interest Rate

✍︎ e.g. Friends, traders, moneylenders, etc.

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