Question

why bank give credit (loan) to people


explain in points ​

Answer 1

Answer:

In return for using their services, banks pay clients a small amount of interest on their deposits. It is an agreement between banks and borrowers where banks make loans to borrowers. By extending credit, a bank essentially trusts borrowers to repay the principal balance as well as interest at a later date.

Answer 2

Answer:

Businesses also use bank credit in order to fund their day-to-day operations. Many companies need funding to pay startup costs, to pay for goods and services, or to supplement cash flow. As a result, startups or small businesses use bank credit as short-term financing.