market principles

Modern economy, based on market principles, largely is a credit economy. Nowadays is impossible the development of any business activity without the participation of the loan. To place a credit deal is necessary to have two member creditor and borrower. Between their interests must have a coincidence, the creditor has a borrowed funds and the borrower, require additional funds. they  must be independent juridical operators who agree with the terms guaranteeing the loan. The loan is a separate economic category, reflecting the objective existence and expression of a specific economic phenomenon with a particular place and role in the market economy.The basis of its essence is the movement of credit value and related loan relationships, and grown as the basis of their specific banking – credit setting. The appearance of credit can be defined as the next most important event for the society after the appearance of money. By credit is achieved shortening the period witch  meet the needs of businesses and households.The credit appears in the exchange, where there is an equivalent exchange of goods in which they changed his owners. Therefore the turnover of capital is the objective basis for loan economic development and credit relations.The turnover of capital is characterized by continuity. In the process of movement of capital fluctuates the sources and amount of resources to new resources. During the movement of capital is carried temporary release of free resources. For example buildings, machines and equipment used in production for a long period,but transfer parts of its value on production.Accumulated in the sinking fund resources can be targeted to those companies by loans,  where they need them. Such is the picture and at the movement of working capital. Where the turnover fluctuations are even larger.Credit is a firm part of commodity production. The reason for obtaining loan, is not because the borrower are poor, but because under the above objective circumstances turnover of capital appears temporary shortage of own funds. Society can not afford immobilization of free resources, just to be accumulate in large quantities needed for the investment process.