Mention Any Three Points of Distinction Between Formal Sector Loans and Informal Sector Loans.

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The three points of distinction between formal sector loans and informal sector loans are:

  1. Banks and cooperatives are called the formal sector credit whereas moneylenders, friends etc. are called the informal sector credit.
  2. Formal sector credit charge less rate of interest whereas informal sector credit charges very high rate of interest.
  3. Formal sector credit is easy to repay whereas the informal sector credit is difficult to repay.

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