Question

What is difference between formal and informal sources of credit

Answer 1

Formal-They require collateral and proper documentation.They give credit on low interest rate and are government associated.

Informal-They don't require proper documentation or collateral.They give credit on high rate.They are money lenders,zamindars etc.


Hiya.. hope it helps..

Answer 2

informal source of credit -
1. its not worked under government.
2. interest rate was not fixed .
3. There are no rules in this sources of credit.
4. example - businessman .
formal source of credit -
1. work under government .
2. interest rate was fixed .
3. There are rules .
4. example - government .