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What do you mean by credit? Explain credit for different situations? |
| Answer» The Credit refers to an agreement under which goods and services, or money is exchanged against a promise to pay later. This agreement is largely based on trust.Another definition of Credit refers to the money given by banks to its customer and the later has to pay it on time. If he fails to pay the same on time, he will be charged by the bank.Credit situation can be divided into two categories:1. Formal sector- It includes banks and cooperative that extends loans to household for entrepreneurship and other personal needs . The rate of interest are charged by them is low.2.Informal sector - It includes moneylenders traders employers relatives and friends .The moneylenders generally charge at a high rate of interest. | |