Question

differentiate between formal sector loans and informal sector loan..

Answer 1

Answer:

• The distinctions: (i)Formal sector loans are such loans which are taken either from the banks or the co-operatives. While informal sector loans are those which are taken from moneylenders, traders, employers, relative and friends. ... On the other hand the rate of interest in informal sector is very low.

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Answer 2

An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government.

Although the informal sector makes up a significant portion of the economies in developing countries, it is sometimes stigmatized as troublesome and unmanageable. However, the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s. Integrating the informal economy into the formal sector is an important policy challenge.

Unlike the formal economy, activities of the informal economy are not included in a country's gross national product (GNP) or gross domestic product (GDP). The informal sector can be described as a grey market in labour.

Other concepts that can be characterized as informal sector can include the black market (shadow economy, underground economy), agorism, and System D. Associated idioms include "under the table", "off the books", and "working for cash"

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