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Differentiate between*formal secter loans*and *informal secter loans* |
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Answer» 1.In Formal sector loans are given by cooperatives and banks whereas in informal sector loans are given by moneylenders , friends etc .2.Formal sector provide cheap and affordable loan while informal sector exploits the borrower for their own benefits.3.Formal sector provide loan at low rate of interest while informal sector provides loan at high rate of interest ..... Yes 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 Formal sector loan\xa0is given by commercial bank whereas\xa0informal sector loan\xa0is given by money lenders, big merchants, etc. ...\xa0Formal sector loans\xa0has a low rate of interest where as\xa0informal sector loans\xa0has a very high rate of interest. |
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