Question

Explain about two different credit situations.
It's urgent..

Answer 1

Answer:

the different credit situation are in the two ways ie formal sector and informal sector Formal includes banks and cooperatives. while the informal includes friends and relatives and by large farmer..etc..

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Answer 2

Answer:

Credit arrangements can be divided into two categories. These are as follows:

i) Formal Sector- It includes banks and cooperatives that extend loans to households for entrepreneurship and other personal needs. The rates of interest charged by them are low.

ii) Informal Sector- It includes moneylenders, traders, employers, relatives and friends. The moneylenders generally charge at a higher rate of interest.