Institutional and non institutional sources of credit difference
The differences between institutional and non institutional sources of credit are:
1. Institutional sources include loans given by co-operatives, commercial banks including the SBI Group and RBI.
While non-institutional include moneylenders, traders and commission agents, relatives and landlords.
2. Institutional sources have proper systematic legal procedure while giving loans.
while Non-institutional sources do not have systematic procedure. They are informal in nature.
3. The interest rate charged in non institutional sources is very high as compared to institutional sources and people are exploited in institutional sources.