What is the difference between formal and informal sector in credit
Rich people prefer to formal sector and poor people refer to informal
Formal sector includes RBI,ICICIbanks and informal sector include moneylender, traders etc.
In formal sector there is collateral and in informal there is no collateral
In easy way we can say that formal sector is goverment sector or informal is private explain it in the question
1.formal credit is provided by banks whereas informal credit is provided by the trader, money lenders2.proper terms of credit like documents colletral and rate of interest are followed in formal credit whereas terms of credit are flexible for the personal benefits in informal credit