why do informal sector charge high rate of interest
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informal sector charge high rate of interest because there are no rules and regulations in informal sector .In formal sector the reserve bank see the functioning of banks but in informal sector there is no any officials that looks the functioning of the credit.
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Informal sector charges high rate of interest beacuae they don't need any colletral or any documentation as a proof for the loan. As they are away from the control of government. The informal sector consist of loan taken by relatives,friends,landowners, Goldsmith e.t.c
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