Choose the given statement that is true/false.

Formal sector loans are different from informal sector loans.

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 above statement is true.
Loans for the informal sector are a type of loan that can be obtained via moneylenders, coworkers, etc. Loans for the formal sector are a type of loan typically obtained from banks or cooperatives. Higher-income individuals and large business organizations can apply for loans from the traditional credit sector with the necessary paperwork and collateral. It has intricate processes. It has a small interest rate. Loanable funds are frequently available. The cost of transactions is considerable. Small farmers in rural areas, low-income individuals, and small businesses in metropolitan areas can borrow money from the informal lending industry. It is relatively easy, non-bureaucratic, and requires little written documentation to obtain credit. It has a highly high-interest rate. Seasonal changes might affect the amount of loanable money and its availability.

Watch 3-min video & get full concept clarity