Question

What are the merits and demerits of formal sector?​

Answer 1

Answer:

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Explanation:

The merits and demerits of formal sector are ;

Merits

(i) Helps to meet the working capital needs of production.

(ii) Helps in ongoing expenses of production.

(iii) Helps in completing production on time.

(iv) Helps in increasing earnings.

(v) Low interest rates.

(vi) Easy access of loans to small cultivators and small scale industries.

Demerits

(i) Difficulty in obtaining loans.

(ii) Collateral issues.

(iii) Documentation could be a problematic issue for few.

(iv) Lack of credibility in rural areas.

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Answer 2

Merits
(i) Helps to meet the working capital needs of production.
(ii) Helps in ongoing expenses of production.
(iii) Helps in completing production on time.
(iv) Helps in increasing earnings.
(v) Low interest rates.
(vi) Easy access of loans to small cultivators and small scale industries.
Demerits
(i) Difficulty in obtaining loans.
(ii) Collateral issues.
(iii) Documentation could be a problematic issue for few.
(iv) Lack of credibility in rural areas.◀️◀️


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