Difference between formal and informal sectors of loan

1.	Difference between formal and informal sectors of loan
Answer» Formal sector loans:\xa0(i)\xa0Loans from banks and cooperatives.\xa0(ii)\xa0Under supervision of the Reserve Bank of India.\xa0(iii)\xa0Reasonable rates of interest.\xa0Informal sector loans:\xa0(i)\xa0Loans from moneylenders, relatives, friend, traders, etc.(ii)\xa0No supervision of any institution.\xa0(iii)\xa0Very high rates of interest.

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