Question

Explain informal and formal sources of credit (with examples)
Please help fast

Answer 1

The formal sector comprises banks and cooperative societies example- RBI monitors in banks,commercial bank,co-operative bank And the informal sector are those who have higher rates on its loans and there is no organisation to supervise this sector ex -Land Lords, money Lender and relatives and friends.










Hope this may help you

Answer 2

Answer:

FORMAL SECTOR

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•We can get formal sector credit loans from Bank, LIC etc

•They are under the control of RBI

•If we don't pay the loan back the take legal action

•They give loan in reasonable interest

•Collateral is necessary

•This take more time for process

.__________________.

INFORMAL SECTOR

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•We can get informal sector credit loans from Money lender, Trader, relatives etc

•They are not under the control of RBI

•If we don't pay back the loan they may take illegal action

•They give loan in high interest

•Collateral is not necessary ,it depends on the people's will and wish

•They actually don't take more time for the process

.___________________.

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Explanation: