Single Answer MCQ
Q-00002711
Explain the concept of formal and informal sources of credit.
1
Formal sources are regulated by the government, informal sources are unregulated
2
Formal sources charge higher interest rates, informal sources charge lower rates
3
Formal sources include banks, informal sources include moneylenders
4
Formal sources are easily accessible, informal sources are difficult to access
Answer and Solution
Answer
C. Formal sources include banks, informal sources include moneylenders
Solution:
Formal sources of credit are institutions like banks that are regulated by the government, while informal sources include individuals like moneylenders who operate outside the regulatory framework.
Watch Video Solution