Banks and cooperatives are the formal sources of credit.

Advantages

1.These institutions are regulated by the Reserve Bank OfIndia. Their rates of interest for loans are controlled. The rates and termsare fixed.

2. There is no exploitation by the lenders.

3. Everyone can take a loan that includes big businessmen aswell as the small cultivators or borrowers.

4. The cost of borrowing is usually less.

Disadvantages

1. The procedure to get the loan is time consuming.

2. They require collateral security.

Informal sources of creditLandlords, traders, moneylenders, employers, friends andrelatives are informal sources of credit.

Advantages

1. No external control over the lending practices.2. Suitable for poor households.

Disadvantages

1. The interest rates can be very high.2. The lenders can use unfair means to get the money back

Inntegrating a country economy with world economy is called globalization. Reduction in economic gap between different nations is done by removing all restrictions between nations on the movement of goods, services, capital, technology and labour.

Below mentioned are some of the quick reactions which were felt after the introduction of globalization:

After 1991, the rise in GDP that dropped to 13% in 1991 -92 extended momentum in the following five years (1992-2001). Moreover, the annual average rate of growth in GDP was recorded to be 6.1%.

Furthermore, export growth skyrocketed to 20% in 1993-94. For 1994-95, the figures were recorded to be 18.4 per cent. Export growth statistics in recent years have been very impressive

Rise in Employment:With the opening of SEZs or Special Economic Zones, the availability of new jobs has been quite effective. Furthermore, Export Processing Zones or EPZs are also established employing thousands of people. Another factor is cheap labour in India. This has motivated big firms in the west tooutsource work to companies present in this region. All these factors are causing more employment.

Surge in Compensation: After the outburst of globalization, the compensation levels have stayed higher. These figures are impressive as compared to what domestic companies might have presented. The level of knowledge and skill brought by foreign companies is obviously advanced. This has ultimately resulted in modification of the management structure.Improved Standard of Living and Better Purchasing Power:Wealth generation across Indian cities has enhanced since globalization has fully hit the nation. You can notice an improvement in the purchasing power for individuals, especially those working under foreign organizations. Further, domestic organizations are motivated to present higher rewards to their employees. Therefore, a number of cities are experiencing better standards of living together with business development.