Mention the characteristics of the formal and the informal sources of credit in India
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formal sector/ sources
it consists of bank and cooperative which are supervised by the receive Bank of India
they give loans on low interest rate
usually the loan required extensive documentation and the some property to be kept as a collateral or a security against any default in payment
informal sector /sources
it consists of moneylenders traders employees landowner
which are not supervised by any organisation
they usually give Loan at a high interest rate which means that the cost of loan is very high to the borrowers
usually the informal sources do not required extensive documentation for giving the loan
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