1. Meaning: Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. 2. Credit for agriculture: In rural areas the main demand for credit is for crop production, which involves considerable costs on seeds, fertilisers, pesticides, water and electricity; farmers borrow at the beginning of the season and repay after the harvest, so credit helps them to meet the ongoing expenses of production and to increase their earnings. 3. Credit for industry and business: Manufacturers need credit to set up factories, to buy machinery and raw materials, to pay wages and to meet the large working capital requirements before the finished goods are sold; without credit such expansion would be impossible. 4. Credit for other needs: People also need credit to buy houses, vehicles and consumer goods, and for education and medical treatment, which improves their standard of living and human capital. 5. Positive role: In all these cases credit helps to increase production, employment and incomes, and hence contributes directly to the economic development of the country. 6. The other side - the debt trap: In situations such as crop failure, the farmer may be unable to repay; he may have to sell part of his land to repay the loan and end up worse off than before - this is the debt-trap, which is common when credit is taken from informal sources at very high rates of interest. 7. Conclusion: Therefore cheap and affordable formal credit is crucial for the country's development - it must be expanded so that it reaches everyone, especially poor households, small farmers and small-scale industries, and self-help groups should be promoted to help the poor get loans without collateral.