Question

differentiate between formal sector loan and informal sector loan

Answer 1

Hey...
• Formal sector loan is given by commercial bank whereas informal sector loan is given by money lenders, big merchants, etc.
• Formal sector loan required collateral where as informal sector loans does not require collateral.
• Formal sector loans has a low rate of interest where as informal sector loans has a very high rate of interest.
Hope this would help you.
Mark it as brainliest if you like.
@ Saadya
Expert
Brainly

Answer 2

Formal sector loan:
They are supervised by the Reserve bank of India.
These consists of loans from banks and cooperatives.
It provides loans at fixed rate and terms.

Informal sector loans:
They are not supervised by RBI.
They get loans from moneylenders, relatives, friends....
It does not provide loan at fixed terms.
It gives loans only for making profits.