Question

Difference between formal sources of credit and informal sources of credit

Answer 1

Answer:

There are two sources : formal and informal.formal sources are financial institution s and agency , banks ,etc while informal sources are friends ,relatives etc

Answer 2

ғᴏʀᴍᴀʟ sᴏᴜʀᴄᴇ ᴏғ ᴄʀᴇᴅɪᴛ:

ᴀ)    ʟᴏᴀɴs ᴛʜᴀᴛ ᴀʀᴇ ɢɪᴠᴇɴ ʙʏ ʙᴀɴᴋs ᴀɴᴅ ᴄᴏ-ᴏᴘᴇʀᴀᴛɪᴠᴇ ɪɴsᴛɪᴛᴜᴛɪᴏɴs ᴀʀᴇ ᴄᴀʟʟᴇᴅ ғᴏʀᴍᴀʟ sᴇᴄᴛᴏʀ ᴏғ ᴄʀᴇᴅɪᴛ.

ʙ)    ᴛʜᴇ ғᴜɴᴄᴛɪᴏɴɪɴɢ ᴏғ ᴛʜᴇsᴇ ʙᴀɴᴋs ᴀɴᴅ ᴄᴏ-ᴏᴘᴇʀᴀᴛɪᴠᴇ ɪɴsᴛɪᴛᴜᴛɪᴏɴs ᴀʀᴇ sᴜᴘᴇʀᴠɪsᴇᴅ ʙʏ ʀᴇsᴇʀᴠᴇ ʙᴀɴᴋ ᴏғ ɪɴᴅɪᴀ – ʀʙɪ.

ᴄ)    ᴛʜᴇsᴇ ɪɴsᴛɪᴛᴜᴛɪᴏɴs ᴀʀᴇ ʀᴇϙᴜɪʀᴇᴅ ᴛᴏ ʀᴇᴘᴏʀᴛ ᴛᴏ ᴛʜᴇ ʀʙɪ ᴛʜᴇ ʀᴀᴛᴇ ᴏғ ɪɴᴛᴇʀᴇsᴛ, ᴀᴍᴏᴜɴᴛ ʟᴇɴᴅɪɴɢ, ᴇᴛᴄ.

ᴅ)    ʙᴏʀʀᴏᴡᴇʀ ɪs ʀᴇϙᴜɪʀᴇᴅ ᴛᴏ sᴜʙᴍɪᴛ ᴄᴏʟʟᴀᴛᴇʀᴀʟs ᴀɴᴅ ᴅᴏᴄᴜᴍᴇɴᴛs.

ɪɴғᴏʀᴍᴀʟ sᴏᴜʀᴄᴇ ᴏғ ᴄʀᴇᴅɪᴛ:

ᴀ)    ʟᴏᴀɴs ᴛʜᴀᴛ ᴀʀᴇ ɢɪᴠᴇɴ ʙʏ ᴍᴏɴᴇʏ ʟᴇɴᴅᴇʀs, ғʀɪᴇɴᴅs ᴀɴᴅ ʀᴇʟᴀᴛɪᴠᴇs ᴀʀᴇ ᴄᴀʟʟᴇᴅ ɪɴғᴏʀᴍᴀʟ sᴏᴜʀᴄᴇ ᴏғ ᴄʀᴇᴅɪᴛ.

ʙ)    ᴛʜᴇʏ ᴀʀᴇ ɴᴏᴛ sᴜᴘᴇʀᴠɪsᴇᴅ ʙʏ ʀᴇsᴇʀᴠᴇ ʙᴀɴᴋ ᴏғ ɪɴᴅɪᴀ – ʀʙɪ.

ᴄ)    ᴛʜᴇʏ ᴄᴀɴ ʟᴇɴᴅ ᴍᴏɴᴇʏ ᴀᴛ ᴀɴʏ ɪɴᴛᴇʀᴇsᴛ ʀᴀᴛᴇ ᴀɴᴅ ᴜsᴇ ᴀɴʏ ᴍᴇᴀɴs ᴛᴏ ɢᴇᴛ ʙᴀᴄᴋ ᴛʜᴇɪʀ ᴍᴏɴᴇʏ.

ᴅ)    ʙᴏʀʀᴏᴡᴇʀ ɪs ɴᴏᴛ ʀᴇϙᴜɪʀᴇᴅ ᴛᴏ sᴜʙᴍɪᴛ ᴄᴏʟʟᴀᴛᴇʀᴀʟs ᴀɴᴅ ᴅᴏᴄᴜᴍᴇɴᴛs.