Institutional vs Non-Institutional Credit Quiz

Known as formal credit

Regulated by the RBI

Info: Non-institutional credit is generally very expensive because it remains unregulated by the RBI.

Provided by moneylenders, traders, and relatives (correct)

Mainly provided for productive purposes

Known as informal credit

Regulated by the RBI (correct)

Provided for productive purposes as well as nonproductive purposes

Generally very expensive

Info: Institutional credit is provided by banks, cooperative societies, etc. and is regulated by the RBI.

Provide credit at high interest rates

Info: SHG’s promote thrift amongst the rural households and offer credit without collateral at moderate interest rates.

Operate without systematic legal procedures

Promote thrift amongst rural households (correct)

Require collateral for loans

<p>It remains unregulated by the RBI</p> Signup and view all the answers

<p>Institutional sources have proper systematic legal procedure while giving loans</p> Signup and view all the answers

<p>It is generally provided by moneylenders and traders</p> Signup and view all the answers

<p>Institutional credit is also known as formal credit</p> Signup and view all the answers

<p>SHGs promote thrift amongst rural households and provide micro credit</p> Signup and view all the answers

<p>It is regulated, has lower interest rates, and systematic legal procedures</p> Signup and view all the answers

<p>What distinguishes institutional credit from non-institutional credit?</p> Signup and view all the answers