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Q.

Landlords, moneylenders and friends are examples of ____ sources of credit.


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Detailed Solution

Landlords, moneylenders and friends are examples of informal sources of credit.
Informal sources of credit feature little to no paperwork and are usually given based on trust of repayment. Informal sources of credit typically feature a higher rate of interest as there is no external organization to control the informal credit sector. In this sector, lenders can resort to unfair means to get their money back. Yet, despite all these demerits, informal sources of credit are still the most popular sources of credit in India.
 
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