The nature and function of credit


Credit relations function in the system of economic relations. They are based on a special type of movement of capital - debt.

Credit relations - is part of economic relations, which is linked to the provision of funds in the loan and return it along with a certain percentage.

Credit relations include:

1) The accumulation of temporarily free funds;

2) an attachment or placement of these funds.

Under Ukrainian law, the loan - a loan capital in the form of money, which is loaned to the conditions of security, return, term, payment and targeted nature of the use.

On enterprises through credit affects relations of commercial calculation, such as it affects the reproductive process through circulation and turnover of the enterprise. Since the essence of the credit that it acts as a redistribution of value in the process of reproduction.

Redistributive function is that the available cash flow of businesses and individuals due to the credit loaned to enterprises and households to meet their production and personal needs.

Antipatsiyna (emission), the function is to create credit money for the currency. It only takes a bank loan. Methods of credit expansion and credit restriction (narrowing) controls the amount of money in circulation, and the withdrawal of money from circulation is achieved with the help of credit is harder than putting into circulation.

The control function is in the process of reallocation of credit provided by the banking supervision of the borrower. The possibility of such control arising from the nature of the loan.

It should be noted that by joining the credit relationship, the borrower should also monitor their activities, in order to fully and timely return the loans.