Question

WHAT IS THE DIFFERENCE BETWEEN FORMAL SECTOR LOANS AND INFORMAL SECTOR LOANS???

Answer 1

Answer:

formal sector as activities which are taxed and monitored by the government and the activities involved are included in the Gross Domestic Product(GDP). In contrast to formal economy is the informal sector which is neither taxed nor included in the GDP and Gross national product (GNP) of a country.

Answer 2

Formal sector loans: 

♥ Loans from banks and cooperatives. 

♥ Under supervision of the Reserve Bank of India. 

♥ Reasonable rates of interest. 

Informal sector loans: 

♥ Loans from moneylenders, relatives, friend, traders, etc.

♥ No supervision of any institution. 

♥  Very high rates of interest