InvestorQ : explain why does the informal source of finance is preferred than formal source in backward classes
Tushar Dagar made post

explain why does the informal source of finance is preferred than formal source in backward classes

Answer
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2 weeks ago
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The interest rate by the formal sources is mostly low as compared to the informal sources. The formal sources are among the welfare ones and informal are usually money-making businesses.

Formal e;g: Government organization & collateral security

Informal e.g: Banks & NBFC

The backward class mentioned here seems to be more hypothical.

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