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Formal and informal sources of credit refer to different channels or institutions through which individuals and businesses can access financial resources. These sources vary in their structure, regulations, interest rates, and level of documentation required. Here's an overview of formal and informal sources of credit: Formal Sources of Credit: 1. Commercial Banks: Commercial banks are regulated financial institutions that provide a wide range of financial services, including loans and credit facilities. They offer various types of loans, such as personal loans, business loans, mortgages, and credit cards. Commercial bank loans typically involve formal application processes, documentation, credit checks, and predetermined interest rates. 2. Cooperative Credit Institutions: Cooperative banks and credit societies are member-owned financial institutions that provide financial services to their members. These institutions focus on serving specific communities or sectors and offer loans...

Loans and credit are financial instruments that allow individuals, businesses, and governments to access funds for various purposes. Let's explore loans and credit in more detail: 1. Loans:    - Loans involve the borrowing of a specific amount of money from a lender, which is typically a financial institution like a bank or credit union.    - Loans can be obtained for personal, business, or government purposes and are usually repaid over a specified period with interest.    - Different types of loans exist, including:      - Personal Loans: Borrowed by individuals for personal expenses, such as education, medical bills, or home improvements.      - Business Loans: Obtained by businesses to fund operations, expansion, equipment purchases, or working capital needs.      - Mortgage Loans: Used for purchasing or refinancing real estate, with the property serving as collateral for the loan.      - Auto ...