Answer :

Credit allows the borrower to increase his spending today. Credit is good because spending drives the economy. One person's spending is income for another. It is the fuel to the engine.

1. Banks Sanction loans to the small and marginal industries, for setting up of their business.


2. Governments’ provide credits to the informal sector industries to bring reform and enhance production.


3. The farmers get credit from banks to purchase seeds, fertilizer, equipment.


Hence it becomes important that these credits are cheap and affordable. So that maximum utilization could be made from these credit by the needy businessmen and farmers.


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