Question

What are informal source of credit? How do they provide loans?

Answer 1

Answer:

Informal source of credit means providing loans without government approval(unofficially).It doesnot have any security. The rate of interest is high.

Explanation:

The informal source of credit was given by land lords,businessman, peasants,etc

The loans given by normal people without any government permission is called informal source of credit.

The formal source of credit is safety than informal source of credit