Question

Information about formal sources of credit

Answer 1

Loans from bank and cooperatives are called formal sector of credit.Loans from the formal sector are less risky for the borrowers ,it has certain rules and regulations and monitored by the RBI but only half of the population are taking loan from this source .Even though rate of interest lower mainly rich household of urban area depend upon formal sector due to the demand of proper documents and collateral.

Answer 2

$\textbf{Answer is in Attachment !}$