What do you understand by the term of credit how can different credit arrangement have a different impact on the life of the borrower explain the help of example
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There are two terms of Credit situation.
first when there the credit plays a positive role for the borrower and it helps him/her to get a positive impact and helps to increase their earning.
For Eg; A shoe maker takes a loan from market to complete his order and he had completed his order on time and pays his loan and earn a profit will be consider as the positive role. if there is less risk in terms of credit then there will be more chances for profit.
and in second case is negative role when the borrower and takes loan and the loan left him/her in worse condition than before.
for eg a farmer takes loan from a money lender for his crops and his crops get spoiled and he had to sell a plot of land to the money lender to repay his loan then definitely the farmer will be in worse condition than before.
first when there the credit plays a positive role for the borrower and it helps him/her to get a positive impact and helps to increase their earning.
For Eg; A shoe maker takes a loan from market to complete his order and he had completed his order on time and pays his loan and earn a profit will be consider as the positive role. if there is less risk in terms of credit then there will be more chances for profit.
and in second case is negative role when the borrower and takes loan and the loan left him/her in worse condition than before.
for eg a farmer takes loan from a money lender for his crops and his crops get spoiled and he had to sell a plot of land to the money lender to repay his loan then definitely the farmer will be in worse condition than before.
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