Credit refers to an agreement in which the lender supplies the borrowers with money, goods and services in return for the promise of future payments.
Importance of credit
(i) In some situation, credit helps to increase earnings and therefore the person is better *** than before.
(ii) We can understand it with an example. Salim obtains credit to meet the working capital needs of production. The credit helps him to meet the ongoing expenses of production, complete production on time and thereby increase his earnings. Thus, credit plays a rival and positive role in this situation.
