why is credit to a crucial element in the economic development
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Credit is a crucial element in the economic development. Cheap and affordable credit plays a crucial role for the country's development. ... Loans and credits help middle class and lower class people to bring about major changes in their lives such as buying a car, constructing a house and etc.
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Explanation:
Credit plays a crucial role in economic life. Some time it plays a negative role some time positive.
Positive Role:
1. Sometimes credit helps to increase earnings makes the person better than before.
2. Credit helps the person to enhance his business his economic condition.
Negative role:
1. Some time person borrow money to increase his business or for personal use.
2. If the borrower fails to pay back the borrowed money, it pushes the person in to bank trap.
To repay the loan the borrower has to sell his land or the lender detained the collateral.
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