Organised credit is also calleda)informal creditb)formal creditc)cooperative creditd)none of theseCorrect answer is option 'B'. Can you explain this answer?

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Class 10 Exam > Class 10 Questions > Organised credit is also calleda)informal cre...

Organised credit is also called

a)
informal credit
b)
formal credit
c)
cooperative credit
d)
none of these

Correct answer is option 'B'. Can you explain this answer?

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Most Upvoted Answer

Organised credit is also calleda)informal creditb)formal creditc)coope...

I think Option A.) informal credit will be right answer..Any way pls check it out and say wat is right answer

Answered by Dr Manju Sen · View profile

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Organised credit is also calleda)informal creditb)formal creditc)coope...

Organised Credit: Definition and Explanation

Organised credit refers to the credit system that is regulated and monitored by the government or other financial institutions. It involves the provision of credit facilities through formal channels such as banks, credit unions, and microfinance institutions. Organised credit is popularly known as formal credit.

Features of Organised Credit

- Regulated: Organised credit is regulated by the government or other financial institutions to ensure that the credit system operates fairly and equitably.

- Monitored: Organised credit is monitored to ensure that the funds are used for intended purposes and that the borrowers repay the loans on time.

- Formal channels: Organised credit is provided through formal channels such as banks, credit unions, and microfinance institutions.

- Interest rates: The interest rates charged on organised credit are fixed and predetermined by the financial institutions.

Advantages of Organised Credit

- Availability: Organised credit is easily available to borrowers since it is provided through formal channels.

- Low-interest rates: The interest rates charged on organised credit are generally lower than those charged on informal credit.

- Easy repayment: Organised credit offers flexible repayment options that suit the needs of the borrowers.

- Transparency: Organised credit is transparent, with clear terms and conditions that are well-defined.

Disadvantages of Organised Credit

- Strict eligibility criteria: Organised credit has strict eligibility criteria that may exclude some borrowers who are in need of credit.

- Collateral requirements: Organised credit may require collateral, which may be difficult for some borrowers to provide.

- Time-consuming: The process of obtaining organised credit may be time-consuming, which may be a disadvantage for borrowers who need funds urgently.

Conclusion

Organised credit is a formal credit system that is regulated and monitored by the government or other financial institutions. It offers numerous advantages to borrowers, including low-interest rates, easy repayment options, and transparency. However, it also has some disadvantages, such as strict eligibility criteria, collateral requirements, and time-consuming procedures.

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