Question

Explain with an example, how credit plays a vital and positive role for development. 

Answer 1

You can take the expample form the book where a manufacturer of shoes takes credit and with the income that he gets he is able to pay back the loan as well as gains profit which contributes in the percapita income of the country and hence developes the economy.

Answer 2

Explanation:

Credit plays a vital role in economic growth and development.

Credit availability at cheaper rates of interest encourages the business or firms to borrow more.

Borrowing more money will facilitate the growth of business or increase in production in the economy.

So, credit supply is the key factor for economic development.