10th Class Social Science Money and Credit Question Bank 10th CBSE Social Science Money and Credit

  • question_answer   Analyse the role of credit for development.                 

    Answer:

                      Development is sustained by a proper credit policy. By giving loans to agriculture, industry and trade, banks provide them with the necessary funds for carrying on their business without problems relating to finance. This results in increased production and services, more employment and profits. Caution has to be exercised by the lenders when high risks are expected, so that there are no losses. As loans from the informal sector have very high interest rates, they do more harm than good. Thus, it is important that the formal sector gives more loans, so that borrowers are not exploited by moneylenders from the informal sector. The results will contribute to overall national development.


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