Question

What do you understand by formal or informal Sources of credit explain with example

Answer 1

Answer:

The main motive of formal sources of credit is social welfare whereas the main motive of informal sources of credit is profit-making.

Banks and cooperatives are the example of formal sources of credit and moneylenders, traders, employees, friends and relatives etc are the example of informal sources of credit.

Answer 2

formal - loan aken from relative , neighbors etc

informal -loan taken from banks etc