• In this chapter, we first looked at the barter system and modern money as a medium of exchange . Then we looked at different forms of modern money and how they are linked with the banking system.
  • We read about loan activities of banks and how they earn profit. Basically, how the whole banking system works.
  • We also saw different credit situations (positive and negative). How credit, if used carefully can be helpful in increasing the income of the borrower but can also push the borrower into a debt trap .
  • Then we studied the terms of credit and what collateral is.
  • After that we looked at different sources of credit in India (formal and informal) and compared them with each other.
  • At last we looked at how in rural villages people especially women are forming self-help groups and dealing with the problem of lack of collateral themselves.
  • Then we saw the example of the Grameen bank of Bangladesh which become one of the success stories in reaching the poor to meet their credit needs at reasonable rates.
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Davneet Singh

Davneet Singh has done his B.Tech from Indian Institute of Technology, Kanpur. He has been teaching from the past 14 years. He provides courses for Maths, Science, Social Science, Physics, Chemistry, Computer Science at Teachoo.