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Differentiate between… (Class 10 Social Science 2026, Q38a)

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Social ScienceCBSE Class 10 · Board exam 2026, set 32/2/1 · 5 marks · Long answer

CBSE Class 10 Social Science 2026: question 38(a)

Set in the CBSE Class 10 board exam of 2026, paper 32/2/1, section D, question 38(a), for 5 marks. Try it first; the hints and our step-by-step solution are below.

Q38(a) · 5 marks · Long answerMoney and Credit

Differentiate between the formal and informal sources of credit.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 32/2/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Compare who supervises, the interest rate and the sources.

Hint 2

Think about repayment and the risk of a debt trap.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Supervision: formal credit is supervised by the RBI, while informal credit has no supervision.

    1 mark

  2. Interest: formal credit carries a lower interest rate, while informal credit carries a high one.

    1 mark

  3. Sources: formal sources are banks and cooperatives, while informal sources are moneylenders, traders, employers and friends.

    1 mark

  4. Debt burden and trap: the burden is lower with formal credit and the borrower is less likely to be trapped, while informal credit is a heavy burden and often a debt trap.

    1 mark

  5. Terms and collateral: formal credit has fixed terms and needs collateral, while informal credit may have no fixed terms and needs no collateral.

    1 mark

Answer: Formal credit: RBI-supervised, low interest, banks and cooperatives, lower burden, fixed terms with collateral. Informal credit: unsupervised, high interest, moneylenders and others, debt trap, flexible terms.

Where the marks are

  • Supervision difference (1 mark)
  • Interest rate difference (1 mark)
  • Sources difference (1 mark)
  • Debt burden difference (1 mark)
  • Terms or collateral difference (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Money and Credit, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 32/2/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.