Question

What is meant by informal sources of credit mention the drawback of this system

Answer 1

The credit that we take from money lenders landlords relatives friends etc is known as informal sources of credit
the drawbacks of informal sources of credit is that the informal sources like money lenders charge high interest rate to the borrowers that decreases the rate of income of the borrowers

Answer 2

The sources of credit which are brought out by our family relatives ,money lenders , friends or any acquaintance means which are not mentioned by the government ,those are called the Informal Sources of Credit .

Drawbacks or it's Limitations:
° These have a large interest rate as compared to formal sources .
° The person ( borrower ) don't have the security against such sources .

ThAnKs !✌️✌️
Hope it helps