Question

explain the social implications of credit.

Answer 1

Answer:

 

1)  Credit or loan refers to an agreement in which the lender provides the borrower with money, goods or services in return for the promise of future payment.

2)  Shopkeepers, farmers, etc obtain credit to meet the working capital needs of production which helps them to meet the forthcoming expenses in production and also helps them to complete production on time thereby enabling them to increase their earnings. Thus, credit plays a vital and positive role in the situation of production and other necessities

3)  In rural areas, the main demand for credit is for crop production. It involves considerable costs on seeds, fertilizers, pesticides, water, electricity, repair of equipments etc.