Answer:
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
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