Quick Answer: What are the two categories of sources of credit explain each?

What are the two categories of sources of credit mention two features of each?

The two sources of credit are: Formal Credit: 1.

Informal Credit:

  • It includes moneylenders, traders, relatives, employers, friends etc.
  • No organization controls the informal sources.
  • The interest rate is decided as per the lender’s interest and there is no check on the unfair means used to get the money back.

What are the categories of sources of credit?

The Main Sources of Credit

  • Friends and family. At first glance, the advantages can seem appealing: you can negotiate the interest rate and payment terms with them directly. …
  • Financial institutions. …
  • Retail stores. …
  • Loan companies. …
  • Yourself. …
  • Cheque cashing centres.

What are the two categories of sources of credit mention four features of each Brainly?

1)Formal Sector. 2)Informal Sector. -Features of formal sector: They usually give loan on low interest rate as compared to informal sector.

IT IS INTERESTING:  Why do people lend their stocks to short sellers?

What are the 2 sources of credit?

Answer: The two sources of credit are formal sources and informal sources: Formal sources of credit: 1. Banks and cooperative societies fall under the formal sector. One can obtain loans from banks or cooperative societies.

What are the two sources of credit How does RBI control banks?

Answer: the r.b.I controls and checks the method of payment,period of credit,interest rate etc. the informal method of credit is when the credit od borrowed by friends,rellatives or money lenders.

What are the sources of credit class 10th?

The different sources of credit are:

  • Banks.
  • Traders.
  • Cooperative societies.
  • Landlords.
  • Moneylenders.
  • Relatives and friends.

What are informal sources of credit mention any two of its features?

(a) Informal sources of credit are moneylenders, traders, employers, relatives, friends etc. (b) There is no government or private organisation that manages or check the credit activities performed by informal sources.

What are the formal sources of credit?

Answer:

Formal sources of loans Informal source of loans
Formal sources typically charge lower interest rates. They charge much higher interest rates for informal sources.
Examples: Banks and cooperatives Examples: Moneylenders, merchants, workers, relatives and friends etc.

What are the features of formal source of credit?

Features of formal sources of credit are :

(c) They follow proper terms of credit which includes collateral, documentation, rate of interest and mode of repayment. (d) They provide cheap and affordable credits with common terms of credit for all.

What are the various sources of credit in India?

Listed below are the five major sources for rural credit in India.

  • Land Development Banks. These banks provide a considerable sum of money as a credit to farmers by using their land as collateral. …
  • Co-operative Credit Societies. …
  • Regional Rural Banks. …
  • Commercial Banks. …
  • Government.
IT IS INTERESTING:  Will my mortgage company allow me to skip a payment?