Difference btw formal and informal sector in 5 points each
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FORMAL SECTOR:
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1️⃣They follow those sources of credit, which are registered by the government and have to follow its rules and regulations.
2️⃣RBI supervises the functioning of formal sources of credit.
3️⃣They generally charge lower rates of interest.
4️⃣Their main motive is social welfare.
✔️Example: Banks and cooperatives.
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INFORMAL SECTOR:
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1️⃣These include those small and scattered units which are largely outside the control of the government.
2️⃣There is no organisation which supervises the credit activities.
3️⃣They charge much higher rates of interest.
4️⃣Their main motive is profit-making.
✔️Example: Moneylenders, traders, employees, relatives and friends, etc.
✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️
----------------------------
FORMAL SECTOR:
----------------------------
1️⃣They follow those sources of credit, which are registered by the government and have to follow its rules and regulations.
2️⃣RBI supervises the functioning of formal sources of credit.
3️⃣They generally charge lower rates of interest.
4️⃣Their main motive is social welfare.
✔️Example: Banks and cooperatives.
-------------------------------
INFORMAL SECTOR:
-------------------------------
1️⃣These include those small and scattered units which are largely outside the control of the government.
2️⃣There is no organisation which supervises the credit activities.
3️⃣They charge much higher rates of interest.
4️⃣Their main motive is profit-making.
✔️Example: Moneylenders, traders, employees, relatives and friends, etc.
✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️✳️
anikachukka66:
Thank u very much
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