10th Class Social Science Money and Credit

  • question_answer 20) What are the differences between formal and informal sources of credit?  



    Points on Which Different Formal Sources of Credit Informal Sources of Credit
    Borrower's capability   Richer people having assets which can be pledged as collateral Poorer people not having assets which can be pledged
    Rate of interest Reasonably low Very high
    Sources   Banks   and   co-operative societies   Traders,moneylenders, landowners, etc
      Action on default of payment   Collateral can be confiscated and sold to recover the loan     Borrowers can be made as bonded labourers or made to part with land owned by them

You need to login to perform this action.
You will be redirected in 3 sec spinner