1 finma

benjamin franklin

the power or ability to obtain money,

goods and services at the present time in

exchange for a promise to pay at a future

determinable time

the reason for credit is the need or desire to

obtain economic goods ahead of the capacity

to pay

Different Views on Credit

the ability to obtain goods,

services or money in exchange of a future promise to

pay

the trust and confidence of the ____ on

the borrower’s ability and willingness to pay

the exchange of actual reality against

the future probability

creates a legal right in favor of the creditor

against the debtor who is under obligation to pay

according to anthropologist _____

and in his book _______ extending credit is a practice that

goes back thousands of years (around ______ to the dawn of human civilization

• It serves as a medium of exchange and is

substitute of money

▪ It facilitates the production and consumption

of goods and usually results to economic growth

▪ It is faster, safer and more convenient form

of obtaining goods and services

• It elevates the moral standard of people

▪ Induces people to save

▪ Enables businessmen and corporations to gather

large amount of capital to undertake large-

scale production

▪ Allows wealth to be fully utilized

▪ Helps in expansion and contraction of the

money supply