You may think of a bank as the place people keep their money, but banks contribute greatly to the economic development of a country. They do so in many ways and we shall look at some of them:
- They provide development loans. Imagine if there was no one to lend to all the regular people who want to start a business, or even the big companies that occasionally find themselves needing cash. It would mean that a lot of the production that takes place through these businesses to boost the economy would not exist.
- Banks are the way to mop up savings and circulate them in a country to keep the economy going. This is why you will find bank branches in spread out areas their job is to take in savings which they can then on-lend. Without them, people would be forced to hang onto their currency and this is not safe. [Read more…]
