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Social Science · 2026 · 3 marks
CBSE 2026 · Region 1 · Set 1 · Q36
Differentiate between formal and informal sources of credit.
Marking-scheme solution
| |p{$\displaystyle 0.47$\linewidth}|} Formal sources of credit | Informal sources of credit |
| (i) The Reserve Bank of India supervises the functioning of formal sources of loans. | (i) There is no organisation which supervises the informal credit sources. |
| (ii) These sources charge a minimal interest on loans. | (ii) These sources charge a much higher interest on loans. |
| (iii) Low cost of borrowing. | (iii) High cost of borrowing. |
| (iv) Chances of debt trap is low. | (iv) May lead to debt trap. |
| (v) The formal sources are loans from banks and cooperatives. | (v) The informal sources are moneylenders, traders, employers, relatives and friends. |
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CBSE Class 10 Social Science past-paper question from the 2026board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.