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Q: How does credit contribute to the growth of the economy?
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What is a macro-credit analysis?

Macro means large as in "The Economy as a whole" and credit analysis means the ability of institutions and prople overall to get credit, to honor their commitment to pay back in a timely manner and the extent to which current and expected returns are positive or negative to present economy and future growth of the economy. Sort of intuitive answer.


How did easy credit contribute to the boom times in the 1920's?

With easily available credit, people were able by many things that were beyond their means. With so much money being spent on credit, the economy boomed.


What is credit off-take?

The growth of banking industry is closely interlinked with the growth in the economy. Slowdown in economy in the past few years meant lower credit offtake. With lower demand for credit, banks had no option but to invest in low yielding Government securities (G-sec). However with the recent recovery in economy the credit offtake is likey to pick-up and pick-up in credit offtake means deploying funds to the commercial sector and earning a higher return than G-sec. Recovery in the select sectors, like steel, textile and capital goods which have high credit consumption, has lead to pick-up in credit offtake. This clearly means a good topline growth for the banks.


What is credit growth?

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How does credit make the economy grow?

Having credit enable people to purchase items at a time they otherwise couldn't afford. For instance, if I can buy a car now on credit I am helping to employ people today who have had to get the raw materials, manufacture, transport and sell me the car. Additionally, I have to keep working to pay off the car and there are all those who finance the car and repossess it if I can't pay it off. Multiply that over thousands of consumers and the economy activity which means growth. If I have to save that money it may take me years to get that money together.

Related questions

How do people contribute to the supply of credit in the economy?

People contribute to the supply of credit in an economy by offering loans to consumers. These would be banks, credit unions, payday loan companies, etc. Consumers contribute to the supply of credit by borrowing money and paying interest, sometimes at very high interest rates.


Explain growth of the global economy?

There are only three factors that constitute and contribute to economic growth: Labor, Capital, Technology.


How do enterprises contribute to economic growth?

Business enterprises contribute to economic growth by providing employment opportunities. This allows for more financial success and more money to flow into the economy.


How do business enterprises contribute to economic growth?

Business enterprises contribute to economic growth by providing employment opportunities. This allows for more financial success and more money to flow into the economy.


What would contribute to a sustained high rate of economic growth in the long run in an economy?

growth in capital per hour accompanied by technological change


How does high envestment levels in physical and human capital contribute to long term growth in the economy?

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How did corporations contribute to the growth of the economy in the late 1800?

Their stockholders provided capital to build factories and buy equipment


How the higher national income will contribute he growth of the economy?

A higher national income reflects an increase in demand from the country itself and exports to outside countries. This contributes to the growth of the economy by increasing employment and wages to meet these demands.


What is one way people contribute to the supply of credit in the economy?

By offering loans, saving money, or, in some cases, investing.


What caused the economic growth of the US's economy after World War 2?

The invention of credit cards


What is a macro-credit analysis?

Macro means large as in "The Economy as a whole" and credit analysis means the ability of institutions and prople overall to get credit, to honor their commitment to pay back in a timely manner and the extent to which current and expected returns are positive or negative to present economy and future growth of the economy. Sort of intuitive answer.


How did easy credit contribute to the boom times in the 1920's?

With easily available credit, people were able by many things that were beyond their means. With so much money being spent on credit, the economy boomed.