Formal sources of credit do not include ___________.

Banks

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Cooperative

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Employers

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None of these

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Solution

The correct option is C Employers

Formal sector credit in India includes loans from banks and cooperatives. RBI supervises their functions of giving loans. Rich urban households depend largely on formal sources of credit. Lower rate of interest on loans is charged as compared to informal sources of credit.

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Access to credit is a challenge for small businesses from both formal and informal sources.

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