What Is Domestic Credit?

Domestic credit refers to credit activities where the source of credit funds and their use are carried out within the same country. The socialist bank pools temporarily idle funds in the hands of enterprises, institutions and urban and rural residents by means of deposits, and distributes funds to production enterprises and institutions in need of funds by means of loans to promote the development of national economy. [1]

Domestic credit

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Domestic credit refers to credit activities where the source of credit funds and their use are carried out within the same country. The socialist bank pools temporarily idle funds in the hands of enterprises, institutions and urban and rural residents by means of deposits, and distributes funds to production enterprises and institutions in need of funds by means of loans to promote the development of national economy. [1]
The principal and interest are then recovered over the term of the loan agreement. This is the basic form of domestic credit. There is also a domestic credit method, in which companies can entrust banks to issue domestic bonds to raise long-term funds. At present, our country offers seller credit for some advanced electromechanical products for equipment upgrading and technological transformation. This is also a way of domestic credit. [1]

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