(i) Increase in per capita income and national income Loan plays an important positive role in the economic development of the country. Businessmen, entrepreneurs, farmers and the general public try to develop their economy by taking loans from banks. Their economic development leads to an increase in per capita income and national income.
(ii) Helpful in creation of employment and development of small and cottage industries. By taking loan, the businessman tries to advance his business, the entrepreneur sets up new factories. In which people get employment.
(iii) Helps in the development of agriculture and agriculture based economic activities. Farmers increase their production and thus fulfill the food grain needs of the country.
(iv) The general public fulfills their small needs. People take loans from banks to increase income and buy houses.
(v) Today, bank loans are playing a big role in helping successful students pursue higher and technical education to complete their education and get good employment. In this way, loans play an important role in economic development.
