Question

Name two formal and two informal sources of rural credit in india .state any two advantages of fomal sources of credit

Answer 1

formal: 
bank ,co operatives
informal;
moneylender,relatives
advantages:
-low interests
-less chances of being a fraud

Answer 2

Formal sources- Bank and Co-operatives.

Informal sources- Moneylenders and traders.

Advantages of formal sources of credit

i. Formal sources such as bank gives loans at fixed amount of interest and such loans are not only for businesses and traders but it is also for farmers and small business. Bank also gives loan for students for their education at low cost of interest.

ii. In this system there is a no chance of exploitation and fraud because this source is directly connected to government.