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Kannaki
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Asked: 2021-01-15T10:09:15+00:00 In:

How do formal and informal sources of credit differ from each other?

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NCERT Important Questions for Class 10 Social Science Economics Chapter 3
Social Science Class 10 Economics
Money and Credit 3
Important Questions
Long Questions

2020-2021cbsechapter 3class 10economicsmoney and creditncertsocial science
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      Formal sector:-

      1. Rate of Interest is lower.
      2. Collateral is must for getting loan.
      3. RBI supervises them.
      4. More documentation is required. Itinvolves many formalities.
      5. Ex.: Banks and co-operatives.

      Informal sector:-

      1. Higher rate of Interest.
      2. Ready to give loans without any collateral too.
      3. No organization to supervise them
      4. Less documentation, less formalities.
      5. Examples: Moneylender, traders, friends, retailers and so on.

       

      For more answers visit to website:
      https://www.tiwariacademy.com/ncert-solutions/class-10/social-science/

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