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

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manisha Kolvenkar answered.
2 years 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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