Credit guarantee is a type of insurance against default provided by a credit guarantee association

or other institution to a lending institution. Credit guarantees enable otherwise “sound” borrowers

Who lack collateral security, or are unable to obtain loans for other reasons, to obtain the credit

They require through banks in the normal way. A government loan guarantee scheme insuring loans

To small firms by the commercial banks was introduced in the UK in 1980. Under this scheme the

Government guarantees repayment to the bank of 70 per cent of the loan in return for an annual

Premium of 1.5 per cent on the guaranteed portion for variable rate loans. Loans are for a period of

Two to seven years. All European Union member states (except Denmark), the USA, Japan and

Other countries have similar schemes.

12.7.1.4. Read and translate the text “Credit as an Economic Concept” without a dictionary.

Make an annotation of it in English.

By credit economists understand the use or possession of goods and services without immediate

payment. There are three types of credit: (a) consumer credit: credit extended formally and informally

By shopkeepers, finance houses and others to the ordinary public for the purchase of consumer

goods, (b) trade credit: credit extended, for example, by material suppliers to manufacturers,

Or by manufacturers to wholesalers or retailers — virtually all exchange in manufacturing