Sources of Credit
There are two kinds of sources for credit facilities that can be opted by a person if he/she is looking for a financial source. One can choose from formal and informal sources of credit.
The formal sources of credit are directly controlled by the government and are expected to follow the rules and regulations made by the government. These include loans from banks and cooperatives.
The informal sources are not controlled by the government and function independently without necessarily adhering to any laws. These are loans from various sources such as money lenders, merchants, traders, employers, etc.
Both the sources of credit are open to the public or customers. But, it is always safe to go with the government-regulated sources of loans as they are well-supervised and secured.