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Social Science · 2025 · 3 marks
CBSE 2025 · Region 5 · Set 1 · Q26
Distinguish between formal and informal sources of credit in India with example.
Distinguish between formal and informal sources of credit in India with example.
Marking-scheme solution
| Formal Sources of Credit | Informal Sources of credit |
| The Reserve Bank of India supervises their functioning. | No one supervises their functioning. |
| In urban areas, it is the main source of credit. | In rural areas, it is the main source of credit. |
| Collateral is required. | There is no need of collateral. |
| Cost of borrowing is low. | Cost of borrowing is high. |
| The process of lending is long and complicated. | Credit is easily available. |
| Do not use unfair means to get their money back. | Use unfair means to get their money back. |
| Example: Banks, Cooperatives, etc. | Example: Moneylenders, friends, family, relatives, agricultural traders, etc. |
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CBSE Class 10 Social Science past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.