Population and banks: percent for credit (concept, interconnections, functions)

In the market economy the payment of percentage for the credit is the redistribution of the part of the profit obtained by the borrower to its creditor. The creditor obtains his percentage because he transfers the part of his capital to the borrower and looses the possibility to obtain its own profit in the time of this credit operation, which he could obtain to capital invested as the credit, if credit was not provided. Creditors establishing the price of their goods, the credits, take into account many factors; eventually, they all come to the relations between the demand and the offer of money, to the regulating influence of the Central bank for establishing the boundaries of the interest rates for the credit for the credit organization with regards to the peculiarities of the current economic situation.

credit, profit, commercial bank, borrower, cost of credit, risk, percent, demand for money, proposal of money, passive and active bank operations