Loands


Why Learning Credit Is Important? The main task of the bank is to collect funds from the community and redistribute the funds to the public / entrepreneurs who need them. Thus, the role of credit in bank operations is very important, in addition to the majority of banks still relying on their main source of income from credit operations so that to get a good margin, credit management is needed effectively and efficiently.

Bank is business. Businesses that trade in credit and money. So bank business is a trust institution. As is well known that the largest bank business in providing the largest contribution as a source of bank income comes from lending, remembering:

  1.  That banks must be able to maintain and develop mutual trust
  2.  That the loan item provided is the largest asset item in the bank's balance sheet
  3.  That credit provides the largest income contribution for most banks
  4.  That the risks contained in lending are quite large
  5.  That banks are intermediaries (financial intermediaries) between surplus funds and other parties who lack funds.


then credit problems need to be studied. The greater the volume of development and the higher the economic growth, the greater the role that is carried out by the bank, both in terms of the mobilization of funds in particular and in terms of the direction and volume of loans granted / disbursed.

In addition, it is also necessary to see the importance of credit economically. Economically, credit can be interpreted as the transfer of purchasing power from one hand to another, and / or the creation of purchasing power.

1. Transfer of purchasing power

The existence of credit (source of funds) is generally collected from many savings / deposits from many people who are willing to set aside their income not to be consumed but to be saved into the bank. Generally savers do not know what their purchasing power / money will be used for. Therefore, they entrust their money to the bank, which will later require it. The bank will be responsible for the security of the savings money. In this case credit is defined as the transfer of purchasing power.

2. Creation of purchasing power

From the credit creditor side is the creation of purchasing power, where with the credit facility it receives, the borrowers / entrepreneurs already have plans for what the credit will be used for investment or working capital.

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