Give one special feature that distinguish formal sector from informal sector?
Answers
Answer:
Formal sector as activities which are taxed and monitored by the government and the activities involved are included in the Gross Domestic Product(GDP). In contrast to formal economy is the informal sector which is neither taxed nor included in the GDP and Gross national product (GNP) of a country.
Answer :
Features of formal sector credit :
It provides loans comparatively at a lower rate & collateral security is required to obtain loans. This sector mainly supervised by the RBI. (Reserve Bank of India). It includes bank & cooperatives .
Features of Informal sector credit :
This sector charges higher interest rates on it's hans as there is no organisation to supervise this sector and collateral security is not required to obtain loan from these informal sectors. This could lead to increasing dept with the borrower and can fall them into a dept - trap .