Difference between the formal and informal …

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Difference between the formal and informal sectoe

Posted by Snover Preet 6 years, 9 months ago

CBSE > Class 10 > Social Science

2 answers

Gaurav Seth 6 years, 9 months ago

(i)Formal sector loans are such loans which are taken either from the banks or the co-operatives. While informal sector loans are those which are taken from moneylenders, traders, employers, relative and friends.

(ii)In the case of informal sector of loans, the rate of interest is quite high. On the other hand the rate of interest in informal sector is very low.

(iii) In formal sector of loans, there is no exploitation unlike the informal sector of loans. In the informal sector, the trader would buy the produce of the farmers at lower price but a bank would never resort to such tactics.

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Rajiv Ranjan 6 years, 9 months ago

Formal sector include banks, cooperative etc where informal sector includes moneylenders, friends, family etc....... Formal sector lends low interest rates while informal sector lends high rates...... In formal sectors people's have low chance to go on dept trap while there are more chance to dept tarp in informal sector.. In formal sector terms of credit needed while no term of credit needed in informal sector.

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CBSE > Class 10 > Social Science