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Why is the supervision of the functioning of formal sources of loans necessary? ​

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ayokenny2001

The supervision of the functioning of the formal sources of credit is necessary because the banks should not only provide loans to rich sections of society but also to poor people.

What is loan?

Loan refers to the lending of money by one or more individuals or an organization to another. It is a sum of money that one borrow from a financial institution, usually a bank or credit union for business or personal purposes.

The supervision of the functioning of formal sources of loans is necessary to check whether the banks actually maintain the cash balance. Also, the banks should follow the right procedures of borrowing and lending money.

Hence, the supervision of the functioning of the formal sources of credit is necessary because the banks should not only provide loans to rich sections of society but also to poor people.

Learn more about loans here: https://brainly.com/question/25599836

twinkle42

Answer:

The supervision of the functioning of the formal sources of credit is necessary because the banks should not only provide loans to rich sections of society but also to poor people. Also, the banks should follow the right procedures of borrowing and lending money.

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