Choose if the given statement is true/false.

Banks and cooperatives are examples of formal sources while informal sources are moneylenders, traders.

see full answer

Your Exam Success, Personally Taken Care Of

1:1 expert mentors customize learning to your strength and weaknesses – so you score higher in school , IIT JEE and NEET entrance exams.

An Intiative by Sri Chaitanya

True

False

answer is A.

(Unlock A.I Detailed Solution for FREE)

Best Courses for You

JEE

NEET

Foundation JEE

Foundation NEET

CBSE

Detailed Solution

The given statement is true.
Banks and cooperatives are examples of formal sources while informal sources are moneylenders, traders. Formal sources of credit provide loans at a fixed rate of interest. The cost of borrowing is lower, and they promote borrowing and more economic growth. They make loans not only to wealthy traders and profitable businesses, but also to small-scale industries, farmers, and borrowers. There is no exploitation, as is the case with informal sectors. While the informal sources of credit do not have any external control over the lending practices, It is suitable for poor households as they do not have to follow certain kinds of procedures and provide various types of documentation.

Watch 3-min video & get full concept clarity