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Question
When compared to formal lenders, most informal lenders charge a
When compared to formal lenders, most informal lenders charge a
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Solution
The correct option is A higher
Informal sector loans include loans from moneylenders, traders, employers, relatives, friends, etc. Informal sector loan providers know the borrowers personally and hence, provide loans on easy terms without collateral and documentation. However, the interest rate is high. Thus, the borrowers get exploited by such lenders.
Informal sector loans include loans from moneylenders, traders, employers, relatives, friends, etc. Informal sector loan providers know the borrowers personally and hence, provide loans on easy terms without collateral and documentation. However, the interest rate is high. Thus, the borrowers get exploited by such lenders.
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