Question

what are the weaknesses of formal credit sector?
​

Answer 1

Answer:

There are two weaknesses of formal sector -

People from rural areas cannot use them, as it requires complex documentation.

They involve collateral security, and various procedures which are time taking.

The villagers are illiterate to understand the procedures.

So the villagers prefer informal sources of credit than formal sources.  

...

..

.

Hope it helps

Answer 2

Answer:

Formal sources of credit Banks and cooperatives are the formal sources of credit.