Question

Distinguish between formal and formal credit resources?​

Answer 1

Answer:

●Formal sources:

1.These sources of credit are registered by the government and have to follow its rules and regulations.

2.RBI supervises the functioning of formal sources of credit.

3.They generally charge lower rates of interest.

4.Their main motive is social welfare.

  Example: Banks and cooperatives.

●Informal sources:

1.These include those small and scattered units which are largely outside the control of the government.

2.There is no organisation which supervises the credit activities.

3.They charge much higher rates of interest.

4.Their main motive is profit-making.

  Example: Moneylenders, traders, employees, relatives and friends, etc.

Answer 2

Answer:

formal sourses-:

1. these sources of credit are registered by the government and have to follow it rules and regulation . 2. RBI supervises the functioning of formal sources of credit. 3. they generally charge low tates of intersting 4. their main motive is social welfare EX- banks and cooperatives

Explanation:

informal sources

1. these include those small and scattred units which are largely oursode the control of the government. 2. there is no organisation which supervises the credit activities. 3. they charge much higher rates of interest. 4. their main motive profit making EX- trades , moneylender