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Different between formal loan and informal loan?

Posted by Yash Mishra 6 years, 4 months ago

CBSE > Class 10 > Social Science

2 answers

Aadya Singh ? 6 years, 4 months ago

Informal loan - 1) These include those small and scattered units which are largely outside the control of government. 2) There is no organization which supervises the credit activities. 3) They charge much higher rates of interest. 4) The main motive is profit- making. For example- Moneylender, trader, etc.

3Thank You

Aadya Singh ? 6 years, 4 months ago

Formal sources - 1) These sources are registered by the government and have to follow its rule and regulations. 2) RBI supervises the functioning of formal sources of credit. 3) They generally charge lower rates of interest. 4) Their main motive is social welfare. Exp- Banks and cooperatives.

3Thank You

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Posted by Shristi Pandey 4 months, 4 weeks ago

CBSE > Class 10 > Social Science