Question

Informal sources are the main source of credit for the rural households in India. Suggest any one.

Answer 1

Answer:

traders moneylenders landlords

Answer 2

Informal sources of credit

Explanation:

Informal sources of credit are not regulated by the RBI. They are mainly given by the local money lenders and pawn brokers where no proper records of the transaction is maintained. Also, they charge a high interest rate for the loan. Sometimes, they give loans without any collateral, which may lead to bonded labour. Informal credit is prevalent in rural areas and the poor are generally exploited by these lenders.