Question

Why are informal sources of credit more convinient and people friendly

Answer 1

It is because of the following reasons.

1) it is easy to take loans from friends , relatives or moneylenders.

2) banks and cooperatives require proper documentations. So some rural uneducated people find it difficult to take loans from banks and cooperatives whereas moneylenders don't ask for documentation and only ask for collateral.

Answer 2

It is easy

No need of collateral

Suitable for poor household