What is credit? What is its importance?

What is credit? What is its importance.

CREDIT refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Importance :

  • Availability of credit is veiy important for development.
    In India, majority of people need credit for various purposes.
  • Farmers in order to increase their production need credit to buy HYV of seeds fertilizers, pesticides, irrigation facilities.
  • People in order to set up business, small scale industry, cottage industry need loans
    to buy raw material machines etc.
  • Government also needs credit for its development projects.