You asked: What are the two main source of formal and informal credit in India?

What are the formal and informal credit sources in India?

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 two sources of formal credit?

1 Answer

  • The two major sources of formal sources of credit are:
  • (i) Banks and (ii) Cooperatives.
  • Need to expand formal sources of credit are :
  • (i) To save the poor farmers and workers from the exploitation by the informal sector credit.

Which are two main informal sources of credit explain them?

(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 two main sources of credit mention features of each?

1 Answer

  • It’s provided by banks and cooperatives.
  • Reserve Bank of India regulates the functioning of the formal sources of credit like the interest rate.
  • The banks have to give RBI all the information regarding the lending processes as well as the borrowers.
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What are informal sources of credit?

(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 informal sources?

An informal source could be an individual or organization that specializes in a particular topic. Information from informal sources can be obtained by interviews, letters, emails or phone calls. Keep in mind that you may need a combination of both formal and informal sources to identify the full range of information!

Which are the two major source 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 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.