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|home Banking Books Money and credit - Ivanov V.M.|
Money and credit - Ivanov V.M.
As you know, credit arises in the field of exchange, where the lender and the borrower enter into a relationship regarding the return movement of the loan value. With the help of credit there is a redistribution of values. However, credit relations do not mediate all redistributive processes in society. A significant part of the monetary resources is redistributed, for example, through the financial system and pricing system. However, the redistributive function of credit is inherent in features that distinguish it from the redistributive function of other economic categories and characterize the specifics of credit redistribution.
The purpose of this function is that through a loan at the expense of temporarily free resources of some legal entities and individuals, temporary needs for funds of other legal entities and individuals are satisfied. The peculiarity of credit redistribution is, first of all, that it covers only temporarily free resources. True, with a commercial loan, there is no preliminary release of resources, but in this case, a loan is only possible if the lender has free funds, and in their absence, the possibility of borrowing them on a repayable basis. Consequently, there is a secondary distribution of resources, i.e., the implementation of the redistributive function of credit.
This feature determines the widespread redistribution of funds through the credit sector, since it covers almost all temporarily free funds of the public economy. The volume of credit resources by potential significantly exceeds, for example, the amount of resources redistributed through the budget sphere. In addition, the repayment of credit resources allows you to re-lend them during this period, which expands the possibilities of lending. This provides a generally significant availability of credit compared to budget funds. The advantage of redistribution through credit is also the efficiency of the provision of funds, while the allocation of budgetary resources is determined for the entire calendar period when planning the budget.
A feature of credit reallocation is the satisfaction of only a temporary need for additional funds, when the reallocated value is received by the borrower for use only for a certain period.
The specificity of redistribution through credit is that it affects not only the value of the gross national product produced in a given period, but also the value of the means of production and commodities created in previous periods. In particular, temporarily free resources accumulated in depreciation funds of enterprises may be issued on credit; the provision for temporary use of previously manufactured equipment under leasing conditions is widespread. In fact, in the process of redistribution through the credit sphere, all the national wealth of society can be included, in contrast, for example, from redistribution through the state budget.
A characteristic feature of the redistributive function of credit is that with its help not only monetary resources, but also commodity ones are redistributed. Commercial and leasing loans, partly consumer loans and international loans are expressed in commodity form. The ability to provide credit in commodity form significantly expands the boundaries of redistribution through the credit sector.
Redistribution with the help of credit is mainly productive in nature, that is, redistributed value is included in the economic turnover of the borrower. This feature is due to such a nature of the loan as repayment. In order to be able to repay the borrowed resources on time and with payment of the loan interest, the borrower must use the funds received as efficiently as possible, invest them in the reproductive process of increasing value.
As a feature of the redistributive function of the loan, one can single out mainly the direct nature of the redistribution. Credit transactions are made in most cases without intermediaries, the lender and the borrower are in direct contact with each other.
The redistribution function covers various aspects and levels of movement of the loaned value. So, redistribution can occur between separate territories. Subjects participate in the credit transaction regardless of their location. In this regard, credit resources mobilized in one district, region, can be used for lending in another district, region. In this case, there is an inter-territorial redistribution.
If credit resources are formed at the expense of temporarily available funds of enterprises in some sectors, and then are used for lending to enterprises in other sectors, then there is an intersectoral redistribution. In conditions when bank credit is the main form of credit, intersectoral redistribution is most characteristic of the credit sector. Commercial banks, possessing the right of free choice of customers, accumulate temporarily available funds of enterprises regardless of their departmental affiliation, and these funds are depersonalized in the total mass of credit resources of the bank. Crediting of enterprises of a certain industry is carried out at the expense of the same impersonal funds. At the same time, the volume of credit resources mobilized in this industry and the volume of credit investments in it, as a rule, do not coincide.
At the same time, credit relations can serve as the basis for intra-industry redistribution. In particular, if a bank specializes in servicing enterprises of one industry (it is a branch), then the resources redistributed by it will be redistributed only within this industry. Redistribution is also intrasectoral in the event that loans received by industry associations are distributed on the principle of repayment between their structural units that do not have legal entity status.
Earlier, credit relations did not cover on-farm reallocation of resources, however, the prerequisites are being created for its partial mediation by credit. The formation of market relations determines the commercialization of enterprises, their desire for maximum profitability and, consequently, production efficiency. Giving the structural units of enterprises real self-supporting rights creates the basis for the redistribution of funds between them on a credit basis. The conditions for on-farm redistribution of funds through a loan are also created in the case of placement of shares of enterprises when they are corporatized among their employees and the use of funds thus mobilized for the development of production.
The formation of market relations leads to a change in the mechanism for the implementation of the redistributive function of credit. Until recently, the redistribution was mainly centralized, that is, it was based on credit planning, which was a process of planned determination of the total amount of credit resources of the country, their sources, as well as planned redistribution. With the reform of the banking system, the development of a network of commercial banks, an increasing role is played by the redistribution of credit resources through the credit market, i.e., the market mechanism of redistribution. In this regard, credit redistribution is increasingly decentralized. Accordingly, its priorities are changing.