Formal credit is from banks with paperwork and lower interest, maybe 8-10%, but they never give me a loan in time for the sowing season. Informal credit is from the local arhtiya who gives cash instantly but charges 24% or more. So the difference isn't just the rate, it's about survival—I pay the high interest because the formal system sleeps while my fields turn dry. Just last season, I missed the bank's deadline by two days and had to go to the arhtiya, my daughter's college fund feeling lighter already.
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