Types of loans. Forms of providing a loan to a borrower In what form is a bank loan provided?
Forms of credit are components that determine the key properties of credit relations, which are interconnected and designed for a specific type of credit relationship.
Depending on the value of the loan, the following forms of credit are distinguished: commodity, cash and mixed.
The commodity form of the loan precedes in cash loan. In this form of credit, goods are loaned out. At the same time, the goods that are the object of the loan ensure its return. Goods are used in economic circulation, and loan repayment most often occurs in money. The goods become the property of the borrower only after the loan is repaid and interest is paid.
The monetary form of credit is a classic form of credit, it means that loans are provided for temporarily free cash. This form of loan largely depends on the situation in the economy, the level of inflation, unemployment, etc. It is used by the state, legal entities and individuals both within the country and in foreign trade.
Mixed (commodity-money) form of credit. This is the case when a loan is provided in the form of goods and is returned in money, and vice versa. This form of credit is typical for developing countries.
Depending on the status of the lender and the borrower, the following forms of credit are distinguished (Fig. 14.1).
In modern market economic conditions, the main form of credit is Bank loan, provided by the company
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Rice. 14.1. Basic forms of credit
commercial banks of different types and types. It is presented exclusively by financial institutions that have a license to carry out such operations from the central bank. The role of the borrower is legal entities, the instrument of credit relations is the loan agreement. The bank receives income from this form of loan in the form of loan or bank interest.
The bank loan form has the following features:
- the bank, as a rule, operates not so much with its capital as with attracted resources;
- the bank lends idle capital;
- The bank lends not just money, but money as capital.
Firstly, the object commercial loan is commodity capital, while the object of a bank loan is monetary capital. Commercial credit is provided by industrial and commercial enterprises to each other when selling goods and serves this sale. Here, loan capital is still merged with industrial (or commercial): entrepreneurs lend capital that is at one of the stages of its circulation, capital in commodity form. With a bank loan, loan capital is separated from industrial and commercial capital.
Secondly, a commercial loan differs from a bank loan in terms of subjects, i.e. participants in credit transactions. With commercial
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In a loan, both the lender and the borrower act as entrepreneurs. With a bank loan, only one of the participants in the credit transaction (the borrower) acts as an entrepreneur, the other participant (the lender) acts only as the owner of monetary capital, since the capital provided by him as a loan does not function in his enterprise.
Thirdly, the dynamics of commercial and bank loans are also different. As for commercial credit, its movement parallels the movement of industrial capital: with the growth industrial production and trade turnover, both the supply of commercial credit and the demand for it increase. The situation is different with a bank loan. An increase in the supply of loanable capital transferred through bank credit does not always reflect an increase in production. Thus, during periods of depression, the supply of loanable capital increases significantly, but not because the scale of production is expanding, but, on the contrary, because production has greatly decreased as a result of the crisis and cannot absorb most of the capital that was previously employed in it. In turn, the increase in demand for loan capital does not always reflect the expansion of production (during crises there is a large demand for loan capital, although the size of production is reduced).
In modern conditions, mainly three types of commercial loans are used in practice:
- loan with a fixed repayment period;
- a loan with repayment only after the borrower actually sells the goods delivered in installments;
- lending by open account when the delivery of the next batch of goods on the terms of a commercial loan is carried out until the debt on the previous delivery is repaid.
The international form is a set of credit relations in which the borrower or lender is usually the state
I 188 st. Other entities - banks, enterprises, the population - can also enter into such credit relationships. A distinctive feature of this form of credit is that one of the participants belongs to another country.
The civil (personal) form is based on participation in a credit transaction as a creditor of individual citizens (private individuals). The civil form of credit can be both monetary and commodity in nature, and can be used by any participants in credit relations. The element of trust takes on increased importance here. The term of such a loan is not rigid; it is often conditional.
A state loan is a loan in which the state, represented by executive authorities at any level, participates. The state, represented by the central bank, can provide loans to regions or individual industries National economy. The loan can be provided either on an auction basis or by direct funds. The state can act as a borrower in the case of placement of government loans or government securities.
A corporate (private) loan is provided by an exporter to a foreign importer in the form of a deferred payment (from two to seven years) for goods. It is drawn up by a bill of exchange or an open account. With a bill of exchange loan, the exporter issues a bill of exchange (draft) to the importer, who accepts it upon receipt of commercial documents. An open account loan is based on an agreement between the exporter and the importer to record in the buyer's account his debt on imported goods and his obligation to repay the loan within a certain period (in the middle or end of the month). Such a loan is used for regular deliveries and trusting relationships between counterparties.
Corporate loans also include advance payment importer. A buyer's advance (advance payment) is not only a form of lending to a foreign exporter, but also a guarantee that the importer will accept the ordered goods (for example, an icebreaker, aircraft, equipment, etc.), which are difficult to sell.
In some cases, other forms of credit are used, in particular:
- direct and indirect;
- obvious and hidden;
- old and new;
- main (predominant) and additional;
- developed and undeveloped, etc.
The direct form of credit reflects the direct issuance of a loan to its user, without intermediate links. An indirect form of credit occurs when a loan is taken out to lend to other entities. For example, if a trade organization receives a loan from a bank not only for the purchase and sale of goods, but also for lending to citizens for goods with installment payment. Indirect consumers of a bank loan are citizens who have received a loan from trade organization for the purchase of goods on credit. Indirect lending occurs when lending to procurement organizations. In the part in which the loan was issued to the procurement organization to pay for the procured products, there is a direct form of credit; in the same part in which the loan was used to pay the procurement organization advances to the donors for the future harvest of agricultural products, an indirect form of credit arose.
An explicit form of a loan is a loan for pre-agreed purposes. A hidden form of credit means that the loan was used for purposes not provided for by the mutual obligations of the parties.
The old form of credit is a form that appeared at the beginning of the development of credit relations. For example, the commodity loan against property was the oldest form used in the early stages of social development. Slave-owning society was characterized by a usurious form of credit, which subsequently exhausted itself, however, under certain conditions, usurious payment for borrowed funds can arise in modern life. The old form can be modernized and acquire modern features. New forms of credit include a leasing loan. Leasing is an agreement to rent movable and real estate for a period of 3-15 years. Unlike traditional rental property leasing transaction is chosen by the lessee, and the lessor purchases the equipment at his own expense. The leasing period is shorter than the period of physical wear and tear of the equipment. Upon expiration of the leasing period, the client can continue leasing for preferential terms or buy the property at its residual value. In world practice, the lessor is usually a leasing company, and not a commercial bank.
The main form of modern credit is cash credit, while commodity credit acts as an additional one. Each of the forms, taking into account the various criteria for their classification, complements each other, forming a specific system adequate to the corresponding level of commodity-money relations.
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Developed and undeveloped forms of credit characterize the degree of its development. In this sense, a pawnshop loan (a type of financial loan that is provided to commercial banks on behalf of the Bank of Russia secured by government securities) is called an antediluvian, “mothball” loan that does not comply modern level relationships. Despite this, such a loan is currently used, although not as widely as, for example, a bank loan.
More on the topic of Loan forms:
- 6.2. Structure and mechanism of functioning of the credit system, forms of credit
- 15. Credit market: concept, forms of credit, structure and infrastructure.
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Loan classification is primarily carried out according to the following criteria:
1) according to the form in which a specific loan is provided;
3) according to the period of provision.
Classification according to these criteria allows us to identify the main forms of credit.
In addition, it is possible to classify a loan in more detail using additional characteristics, while talking about the types of loans within one form or another.
Type of loan- this is a more detailed description of the main form of credit by highlighting additional features. The detailed classification is based on the principles of lending, therefore many specific types of loans reflect the specifics of the movement of credit, i.e. they characterize individual aspects of the organization credit process.
TO primary forms loans include: commodity; monetary and mixed.
Product form- this is a form of credit, which is characterized by the provision by the lender of things, goods on the basis of a counter transfer of an equal number of other things, goods of the same kind and quality.
Such transactions were widely used in ancient society. Roman law regulated such credit relations and defined them as a loan agreement. Roman jurists made a distinction between borrowing and lending. When lending, not every similar thing was subject to return, but precisely the one that was lent (the very horse that was taken for plowing). When borrowing, any similar thing was subject to return, that is, a thing with the same generic characteristics (grain of the same variety).
Based on the commodity form of credit, its comprehensive development monetary form - This is a form of credit, which is characterized by the transfer of money on terms of repayment .
In modern farming, this form has become predominant. From the very moment of her appearance she was destined special role, because money is an absolutely liquid and easily replaceable asset.
Along with the indicated forms, there is mixed form a loan that combines a number of properties of the first two.
Indeed, credit can be provided both by the transfer of goods, which is characteristic of the commodity form, and by the transfer of money, which is characteristic of its monetary form. In this case, repayment will be carried out in the reverse order - in money or goods.
Depending on who is the lender and borrower in the transaction, the following loans are distinguished:
1) commercial (economic);
2) banking;
3) civil (personal);
4) state;
5) international;
6) consumer.
Commercial loan.
A commercial loan can be characterized as a loan provided by one legal entity (seller) to another legal entity (buyer) in the form of a deferred payment for goods sold, or by buyers to sellers in the form of an advance or prepayment for goods supplied.
Commercial lending is the main financial instrument for selling products in wholesale trade. Selling goods on credit has become a common way of selling them by industrial companies; it is becoming an important tool of competition by additionally attracting customers. The main reason for the widespread use of this form of credit is the expansion and strengthening of economic ties between business entities.
In modern conditions, mainly three types (types) of commercial loans are used in practice:
1) with a fixed maturity;
2) with payment of the price only after the borrower has actually sold the goods delivered in installments (consignment);
3) lending on an open account.
In the first case, after delivery of goods, the buyer transfers a promissory note to the seller as a promissory note to pay for the goods after a certain period. Or the seller himself issues a draft (bill of exchange) to the buyer, who, having received the commercial documents, accepts it, that is, agrees to payment within the period indicated on it.
In the second case, we are dealing with consignment. It is a method of trading on credit in which the retailer receives goods without the obligation to pay for them. This trade is often spoken of as the transfer of goods for sale. If the goods are sold, then payment will be made to the manufacturer, and if not, the retailer can return the goods to the manufacturer without paying a penalty. Consignment is usually used when selling new, atypical goods, the demand for which is difficult to predict.
Under an open account agreement, once accepted by both parties, the buyer has the right to make periodic purchases without having to apply for credit on a case-by-case basis. The normal procedure for a transaction is that when a buyer orders a product, it is shipped immediately and payment for it is made within the specified time frame upon receipt of the invoice.
The use of a commercial loan requires the seller to have sufficient capital in case of a slowdown in receipts from debtors. Therefore, in the modern economy, commercial credit is actively used primarily by large companies that have the most favorable conditions for obtaining financial resources through accounting and pledging bills and through bank refinancing of a commercial loan (for example, factoring).
Bank loan.
This is a loan whose main form is the transfer of funds. Provided exclusively by specialized credit institutions licensed to carry out such operations from Central Bank. The borrower can be legal entities, state or local authorities. Credit relations are formalized by a credit agreement or a credit agreement.
A bank loan differs from a commercial loan in the following ways:
a) the role of lender for a bank loan is performed by specialized financial institutions, and not any legal entities associated with the production or sale of goods;
b) the average interest rate on a commercial loan is usually lower than the average bank interest rate for a given period of time. The commercial loan fee is included in the price of the product, and is not specifically determined through a fixed percentage of the base amount;
c) the term of a commercial loan is usually much shorter than that of a bank loan.
A bank loan is classified according to a number of criteria.
Method of issuing (providing) a loan:
a) cash or non-cash loans (by transferring funds from account to account or by issuing cash from an account);
b) refinancing (rediscounting bills, purchasing resources on the interbank market, issuing bonds and other debt obligations by a commercial bank);
c) re-registration (debt restructuring);
d) bill loans.
Loan currency. Loans are provided in national currency, in the currency of the creditor’s country, and in the currency of a third country.
Number of participants. Bilateral and multilateral transactions are possible (lending by a banking consortium, syndicated loans).
Purpose of a bank loan.
Loans are provided:
a) to increase fixed capital (renewal of production assets, new construction, expansion of production volumes);
b) for temporary replenishment of working capital
c) for the implementation of investment projects;
d) mortgage loans, etc.
Delivery technique:
a) one-time loans, i.e. issued in one amount;
b) limited loans (overdraft; credit lines).
Credit line involves the use borrowed money within the established limit. Within its framework, enterprises can receive funds for the purposes specified in the agreement and return them during the validity of the credit line agreement. There are the following types of credit lines: seasonal; renewable, i.e. the client, after repaying the loan debt, has the right to receive a loan again within the established limit; a credit line notifying the client about the upper lending limit, exceeding which is unacceptable, or involves paying increased interest for exceeding it; confirmed line - each time the client is required to agree on the conditions for providing a specific amount within the credit line.
Overdraft represents the elimination of a temporary shortage of working capital for an enterprise to make current payments by crediting the bank client's current account using the bank's funds in the amount of no more than 10-15% of the monthly turnover on the client's current account. It is provided, as a rule, against the receipt of funds in the client’s current account, which are immediately written off to repay the overdraft, i.e., in fact, without collateral (although it may be provided for under an agreement with the bank).
By criterion security Loans are divided into secured and unsecured. The only form of ensuring the repayment of unsecured loans is a loan agreement. Secured loans are the main type of modern bank loan, in which one of the basic principles of lending finds its practical expression. The security can be any property owned by the borrower, most often real estate or securities. If the borrower violates its obligations, this property is sold to compensate for losses incurred. The size of the loan issued is usually less than the average market value of the proposed collateral and is determined by agreement of the parties.
Maturity.
Depending on the repayment period, loans are divided into short-term, medium-term and long-term.
A) Short term loans are provided, as a rule, to replenish working capital (current lending of working capital) of the borrower. Most actively used in stock market, in trade and services. The repayment period for this type of loan usually does not exceed one year.
b) Medium term loans are provided for a period of one to three years for purposes of both production and purely commercial nature. Most widespread in agricultural sector and with partial modernization of production.
V) Long-term loans are used, as a rule, for investment purposes. Like medium-term loans, they service the movement of fixed assets, characterized by large volumes of transferred credit resources. Used when lending for reconstruction, technical re-equipment, new construction at enterprises in all sectors of the economy. The average repayment period is usually from three to five years, but can reach 25 years or more, especially if appropriate financial guarantees are obtained from the state.
By repayment methods loans are divided into:
1) loans repaid in one amount at the end of the term;
2) loans repayable in installments;
3) loans repaid in unequal installments over the loan term (usually with a grace period).
Loans repayable one-time contribution(payment) on the part of the borrower is a traditional form of repayment of short-term loans, very functional from the standpoint of legal registration, since it does not require the use of a mechanism for calculating differentiated interest.
Specific conditions (procedure) for the return of loans repaid in installments during the entire term of the loan agreement, are determined by the agreement, and are used, as a rule, for medium-term loans. For long-term loans for investment goals a grace period (up to a year) is often applied, during which the borrower does not pay any interest or part of the debt. During this time, the borrower manages to install the equipment and start production.
By type of interest rate loans are divided into: loans with a fixed interest rate and loans with a floating interest rate.
According to various methods of charging interest There are several types of loans:
a) loans on which interest is paid at the time of its total repayment. Traditional for market economy a form of payment for short-term loans that is the most functional in terms of ease of calculation.
b) loans, the interest on which is paid in equal installments by the borrower throughout the entire term of the loan agreement. A traditional form of payment for medium- and long-term loans, which has a fairly differentiated nature depending on the agreement of the parties (for example, for long-term loans, interest payments can begin both after the end of the first year of using the loan, and after a longer period).
c) loans, the interest on which is withheld by the bank at the time of its immediate issuance to the borrower. For a developed market economy, this form is absolutely uncharacteristic and is used only when inflation is high.
Civil (personal) loan.
This basic form of credit is characterized by the participation of individual citizens in credit relations. They act as lenders and borrowers to each other when borrowing money or goods for personal rather than business purposes. In general, these relationships are of a local (family, kinship) nature and are not formalized in a loan agreement.
State loan.
The main feature of this form of credit is the indispensable participation of the state in the person of central and local executive authorities. Subjects state loan are legal entities and individuals, on the one hand, and central and local authorities, on the other. The state acts as a borrower or lender. Traditionally, this form of credit is associated with the issue of government bonds or other securities and is called a government loan. Much less frequently, the state acts as a lender, providing loans to legal entities and individuals.
State credit also includes the provision by the state of guarantees for borrowed obligations of legal entities and individuals.
Government loans can be divided into types according to the following criteria:
1) by deadlines for provision loans: short-term (with a repayment period of up to 1 year), medium-term (from 1 to 5 years) and long-term (over 5 years) loans;
2) by location: internal and external (international) loans;
3) by subjects of relations: loans placed by central and local authorities;
4) by market status: market (freely placed on the stock market) and non-market - loans that are not subject to circulation on the market. They are designed for certain (target) categories of investors;
5) by profitability: interest or zero coupon.
Interest-bearing loans involve (from 2 to 4 times a year) the payment of income on coupons - tear-off receipts of the bond. Short-term loans usually do not have coupons. They are sold at a discount from the face value specified on the bonds, and are redeemed at face value. The difference is the amount of income on the bond.
6) by method of determining income: with fixed income and floating income.
International credit.
International credit is a loan that characterizes the form of credit relations between states or between economic entities in different countries.
It is used in the form:
1) commercial (intercompany);
2) banking;
3) interstate credit.
At the same time, in credit relations with the participation of states and international institutions always appears in monetary form; in foreign trade activities - in monetary and commodity form (as a type of commercial loan to an importer or exporter).
Private enterprises (including banks) act as borrowers and lenders. government agencies(ministries and departments) and international (IMF, IBRD) and regional (EBRD) financial organizations.
Specific types of international credit can be classified according to a number of criteria:
1) by intended purpose: commercial or cash loans, including funds for the acquisition of fixed capital, new construction, and other investment needs;
2) by deadline for submission: short-term, medium-term and long-term loans;
3) by currency of provision: loan in the currency of the borrowing country or
creditor country, in the currency of a third country.
A characteristic feature of an international loan is its additional legal or economic protection in the form of private insurance and government guarantees.
Consumer loan.
This is a form of lending to individuals. The goal is satisfaction consumer needs population - for the purchase of land, housing, dachas, cars, durable goods. Provided against a mortgage (mortgage) of land, housing, car pledge, securities, guarantee of third parties.
The role of a lender can be either specialized financial and credit organizations and banks, as well as any legal entities that sell goods or services.
Typically, durable goods (cars, refrigerators, furniture, household appliances) are sold with the help of such a loan. The loan term is up to 3 years, the interest is from 10 to 25. The population in industrialized countries spends from 10 to 20% of their annual income to cover consumer loans. In case of non-payment, the property is seized by the creditor.
Loans are classified according to various basic characteristics. Depending on what kind of loan is presented in a credit transaction and who is the creditor, there are five independent forms of credit.
Rice. 17. Scheme of forms and types of credit
(borrowers: 1 – on a current account, 2 – on a deposit account)
Commercial loan. One of the earliest forms of credit relations. It is based on the delay by the seller company of payment for the goods and the provision by the buyer company of a bill as its debt obligation to pay the purchase price after a certain period. The two most common types of bills are: simple, containing the borrower's obligation to pay a specified amount directly to the lender, and transferable (draft), providing a written order from the lender to the borrower to pay set amount to a third party or to the bearer of the bill.
The need for a commercial loan arises from the reproduction process itself: the discrepancy between production and sales periods. As a result, some manufacturers entered the market with goods, while others had a need to buy goods. However, having not sold their products, they do not have the funds, and therefore the trade transaction will take place only if they sell by installments. Hence the purpose of this form is to speed up the sale of goods and the entire process of capital circulation and to extract additional profit.
A commercial loan has certain disadvantages:
Limited by the size of the reserve capital of the loan. Selling by installments is possible if the entrepreneur has excess capital;
Depends on the condition of its return flow. When production declines, loans are not repaid and the chain of credit connections is disrupted and its size is reduced;
Has a strictly defined direction, i.e. provided by one enterprise to another associated with the first technological chain (for example, a leather production plant provides a commercial loan to a shoe factory). A commercial loan in the opposite direction is not possible.
In Russia, until recently, commercial credit had a limited scope of application. The expansion of its use is hampered by inflation, the crisis of non-payments, and unreliable partnerships.
In practice, the following types of commercial loans are used:
1) with a fixed maturity;
2) with a return after the actual sale of goods received on credit;
3) on an open account, when a secondary supply of goods on the terms of a commercial loan is carried out to repay the debt on the previous delivery.
So, a commercial loan is a loan provided by operating business entities to each other when selling goods on an installment plan.
Bank loan. This is the most common form of credit relations in the economy. It is banks that most often provide loans to business entities that temporarily need financial assistance.
Lenders are usually specialized financial institutions licensed by the central bank to carry out such operations. Borrowers are, as a rule, legal entities. The instrument of credit relations is a credit agreement (agreement). Income is a loan (bank) interest, the rate of which is determined by agreement of the parties, taking into account its average rate for a given period. A bank loan has its own characteristics:
Its source is, as a rule, attracted capital, i.e. received from funds of bank clients;
The bank lends the value, i.e. temporarily free funds of business entities placed in bank accounts;
The bank provides not just money, but money capital, which, having circulated in the production process, is returned in increments.
Bank loans are classified according to different criteria:
1) by maturity:
Short-term – usually up to six months to compensate for a temporary shortage of own working capital;
Medium-term – for a period from six months to one year;
Long-term – over a year (in some countries – over three to five years).
2) by repayment method:
A loan repaid by the borrower in a lump sum;
A loan repayable in installments over the entire term of the loan agreement.
3) by security:
Trust loans, the only form of security is the loan agreement;
Secured loans, which are protected by the borrower’s property (real estate, securities);
Loan against financial guarantee of third parties;
· agricultural loans, usually seasonal in nature, are provided for agricultural production;
· commercial loans to operating entities in the field of trade and services;
· mortgage loans secured by real estate; interbank loans are provided by lending institutions to each other.
So, bank credit is a loan provided by banks and other monetary entities to borrowers in the form of cash loans.
Consumer loan. Valid for targeted lending to individuals in commodity or cash forms. The lender is entrepreneurs in the retail sale of goods in installments, usually durable goods (furniture, cars and trucks, refrigerators, etc.) and credit organizations that provide cash loans to the population for the purchase of land and other real estate (apartments, houses) , payment for expensive medical care, etc.
Abroad, this form of credit has become very widespread and is used by all segments of the population through the system credit cards. In Russia, consumer credit has just begun to develop in the form of lending to citizens secured by real estate or selling some goods in installments (for example, apartments).
State loan. Its distinctive feature is participation in credit relations of the state represented by its authorities at various levels as a lender or borrower. Acting as a lender, the state, through the central bank or treasury system, provides lending:
1) priority sectors, regional or local authorities in need of financial resources when budget financing from commercial banks is impossible due to market factors;
2) commercial banks and other credit institutions in the process of direct or auction sale of credit resources on the interbank loan market. As a borrower, the state places government loans through banks or on the government short-term securities market. The reason for the growth of such loans is budget deficits, associated mainly with unproductive military and administrative expenses. This is the main form of government credit. Its expansion, associated with a chronic budget deficit, necessitates an increase in the cost of servicing loans - their repayment and interest payments, which ultimately leads to a huge public debt. As a result, government credit becomes a regenerator of its further growth. In Russia according to federal budget in 2000, the maximum amount of domestic public debt amounted to 593.2 billion rubles, the servicing of which requires more than a quarter of all expenses.
In world practice, government credit is used not only to attract financial resources, but also as a effective tool centralized credit regulation.
International credit. This is the latest form of development, when economic relations went beyond national boundaries. It operates at the international level, the participants of which can be individual legal entities, the governments of the relevant states, as well as international financial and credit institutions (International Monetary Fund, World Bank, European Bank, etc.). This loan is classified according to several basic criteria:
By type - commodity, provided by exporters upon deferred payment for goods or services, and foreign exchange in a delicate form;
By purpose - commercial, related to foreign trade, financial – direct investment, repayment of external debt, foreign exchange interventions;
By loan currency - in the currency of the debtor country, creditor country, third country and in the international monetary unit of account (SDR, euro);
By security - protected(trade documents, real estate, securities, etc.) and blank – against the debtor's obligations (solobill with one signature).
International credit plays a dual role in the country's economy. Positive - stimulating the acceleration of the development of productive forces, expansion of the production process, foreign economic activity, and negative - exacerbating the contradictions of a market economy, forcing the overproduction of goods, increasing disproportions in social reproduction and competition for markets, areas of capital application and sources of raw materials.
Russian state in international credit relations, as well as within the country, it acts primarily as a borrower. Its external debt is estimated at over $150 billion.
A special form of credit is usurious loan, which in the past was of great importance along with commercial credit. Currently with expansion credit system it almost disappeared from the capital market. His distinctive features are:
Ultra-high interest rates;
Lenders are individuals or business entities that do not have a license for commercial activities;
Criminal methods of collecting borrowed amounts from a defaulter.
In the majority foreign countries usurious lending is prohibited by law. In Russia it has received limited distribution.
Types of credit. This is a more detailed description of the organizational and economic characteristics of the loan classification. There are no uniform world standards for species. Each country, depending on the characteristics of credit relations, establishes types of credit in its own way.
In Russia, types of loans depend on:
1) loan payment term (short-term - up to six months, medium-term - from six months to one year, long-term - over one year);
2) the object of lending (purchase of raw materials, fuel, materials in industry, purchase of various goods in trade; costs of crop and livestock production in agriculture);
3) sectoral focus (industry, construction, transport, trade, etc.);
4) security (direct - loans are issued for specific inventory items; indirect - provided to cover the cash gap in payment turnover; unsecured);
5) fees for use (paid - the borrower pays interest, free - the borrower only repays the debt without paying interest).
Divide the loan into cheap With low percentage And Expensive, when the percentage reaches a high level.
In world practice, other criteria for classifying types of loans are used, for example, loans for legal entities and individuals.
Loan interest
Money as a credit resource is an object of purchase and sale that has its own price - loan interest. Interest is a certain amount of money received by the lender from the borrower for the “goods” - in this case, for the use of temporarily loaned money.
Loan interest– objective economic category, which is a kind of price of the value lent for temporary use (loan capital).
There are various forms of loan interest, their classification is determined by a number of characteristics (Fig. 18).
Rice. 18. Forms of loan interest
For the lender, the purpose of the transaction is to make a profit on the loan provided to the entrepreneur; the entrepreneur also raises funds in order to increase profits. At the same time, the entrepreneur’s profit received from the loan attracted into circulation is the source of payment of loan interest. Thus, part of the profit of the entrepreneur (borrower) is profit (in the form loan interest), received by the owner of the funds (creditor).
From the point of view of the lender, the absolute value of the interest, which is not correlated with the amount of the loan, does not mean anything. Therefore, for practical purposes, to determine the effectiveness of credit transactions and determine the acceptability of a particular loan price, it is used relative indicator such a price - rate (rate) of interest. This is a characteristic ratio of the amount of interest paid for a certain fixed period of time. (interest payment) to the loan amount:
Where Np– interest rate;
Etc– amount of interest paid;
WITH– the amount of the loan (credit).
The modern functioning of loan interest is characterized by certain areas of regulation of economic processes:
1. Through the interest rate, the ratio of demand and supply of credit is balanced. It promotes a rational combination of own and borrowed funds, since borrowed funds brought into circulation (in excess of needs) reduce the overall level of return on investment.
2. Interest regulates the volume of deposits attracted by the bank. For example, a reduction in the need of farms for borrowed funds leads to a decrease in the profits of credit institutions. In this case, they are forced to reduce the interest rate on attracted deposits, which, in turn, leads to a decrease in the volume of their receipts. With an increase in demand for loans, the reverse process is observed.
3. The interest rate policy of a commercial bank is aimed at managing the liquidity of its balance sheet and is an incentive to attract the most stable funds (time deposits). Differentiation of the level of loan interest on active operations depending on the liquidity of investments leads to compliance of the demand for credit on the part of borrowers with the liquidity requirements of the banks' balance sheets.
The most common form of loan interest is bank interest. Bank interest arises when one of the subjects of credit relations is a bank.
Commercial banks When concluding credit agreements, they independently agree with borrowers on the amount of interest rates. With the development of market relations, the rate of interest will tend to the average rate of profit in the economy. In any case, the magnitude of the dynamics and interest rates is influenced by both general, macroeconomic factors and private factors that depend on the activities of the participants in the credit process themselves, including individual banks.
To the number common factors relate:
The relationship between supply and demand for borrowed funds;
Regulatory policy of the Central Bank;
Inflation rate in national economy and etc.
Private factors are determined by the operating conditions of a particular bank (credit institution), its position in the credit market, the chosen credit and interest rate policy, and the degree of riskiness of the operations carried out.
The level of interest rates on active bank operations is formed largely on the basis of supply and demand for borrowed funds. However, this level is significantly influenced by:
- “cost” of loan capital of a given bank;
The borrower's creditworthiness;
Target direction, term and volume of the loan provided;
Ways to ensure loan repayment, etc.
When determining interest rates for each specific transaction, banks are guided by rate level, which, on the one hand, would not force the borrower (lender) to abandon the transaction, on the other hand, would allow the bank not only to reimburse its costs, but also make a profit (preferably not lower than average).
The bank’s costs (expenses) for carrying out loan operations consist of two complex groups of expenses, each of which includes several elements:
1. Costs of attracting resources, including:
Paid interest on interbank loans (including loans from the Central Bank) and deposits;
Interest paid to enterprises, organizations and institutions for money stored in their settlement and current accounts;
Interest paid on deposits of individuals.
2. Expenses to support the bank’s lending activities, including including:
Costs of wages for employees involved in attracting and deploying resources;
Expenses for maintaining the management staff, including entertainment expenses;
Depreciation of equipment, machinery and mechanisms;
Payment for computer center services, administrative, clerical, postal, telegraph and other expenses.
The form of credit is the types of credit arising from the essence of credit relations. The loan structure includes the lender, the borrower and the value lent.
Classification of loan forms
Today, a person is rarely limited to one loan; most have a comprehensive package banking services, which also includes deposits, credit and debit cards, etc. In addition, the development of lending has led to the fact that forms of credit also do not stand still.
The expansion of the range of banking services is accompanied by a proportional increase in banking risks associated both with attracting new, smaller and less reliable clients, and with an increase in the complexity of the lending services provided.
In this regard, a set of mechanisms designed to reduce loan risks depending on the form of the loan is of great importance.
The forms of credit depending on its value are as follows:
commodity form - lending is carried out in goods; sale of goods in installments, rental of things, leasing of equipment are often accompanied by a monetary form of credit;
monetary form - appeared with the emergence of the monetary form of value, the most common;
mixed form (commodity-money) - the loan is provided in the form of goods and is returned in cash or vice versa; used in the economies of developing countries.
direct form - issuing a loan to the borrower without intermediate links;
indirect form - a loan is taken to lend to another economic entity;
explicit form - the loan is provided for pre-agreed purposes;
hidden form - the loan is used for unintended purposes (for example, for the implementation of currency arbitrage);
an old form that appeared at the beginning of the development of credit relations (for example, usurious credit);
a new form, which should include a leasing loan, a loan using plastic cards;
a developed form of credit, which includes a bank loan;
the undeveloped form reflects an insufficient degree of development
credit relations (pawn loan).
Depending on the subjects of lending, the following forms of credit are distinguished.
Bank loan- a form of credit relations in the economy, when one of the subjects of a credit transaction is a specialized financial and credit institution licensed by the Central Bank. Its instrument is a credit agreement or credit agreement. At the same time, the funds provided on credit are capital for the bank, generating profit.
Interbank loan- credit institutions are the lender and the borrower.
Civil loan (personal)- individual citizens participate as subjects in a credit transaction; in this case, a credit agreement is usually not concluded, but a promissory note is more often used.
Commercial loan (economic)- a loan provided by enterprises and other economic entities to each other for the purpose of accelerating the sale of goods. These relationships manifest themselves between legal entities in the form of sales of products, works, services with deferred payment, i.e. It is based on the deferment of payment by the enterprise - the seller for the goods and the provision by the enterprise - the buyer of a bill as a promissory note to pay the purchase price after a certain period. Restrictions on the use of commercial loans:
firstly, the size of a commercial loan is limited by the amount reserve fund creditor enterprises;
secondly - cannot be used for issuing wages, since it is often provided in commodity form.
State loan- this form of loan combines two concepts:
- a) the state is a creditor, i.e. the state performs the functions of a creditor. It's through central bank carries out lending to individual regions, specific industries experiencing an increased need for financial resources, as well as commercial banks in the process of selling credit resources on the interbank loan market;
- b) the state is the borrower, i.e. in the process of placing government loans when carrying out operations on the government short-term securities market. The main source of government credit is government bonds, which can be issued by central and local governments. The state uses this form to cover the state budget deficit.
International loan- a set of credit relations operating at the international level, with additional legal and economic protection.
Here the same entities enter into credit relations:
- - banks
- - enterprises
- - state
- - population
However, one of the participants in the credit transaction must belong to another country. In addition, international credit and financial institutions (IMF, IBRD, etc.) can be participants in an international loan.
Usurious loan- occurs by issuing loans to individuals or business entities that do not have a license from the Central Bank. Characterized by ultra-high percentages (from 100 to 200%) even in currency transactions. Usurious credit arose from the underdeveloped infrastructure of the national credit system and the unavailability of funds for certain categories of borrowers.
Forms of credit according to a unified classification.
In global banking practice, there is no unified classification of banking forms of credit. This is due to differences in the level of development of banking systems in different countries, their established methods of providing loans. However, most often in the economic literature there is a classification of loan forms according to the following criteria:
- - purpose (purpose of the loan);
- - area of use;
- - terms of use;
- - provision;
- - method of issue and repayment;
- - types of interest rates.
According to their purpose, bank loans can be divided into the following groups:
- - industrial
- - agricultural
- - investment
- - consumer
- - mortgage
Industrial loans are provided to enterprises and organizations for the development of production and to cover the costs of purchasing materials.
Agricultural loans are provided to farmers and peasant households to facilitate their activities in cultivating land, harvesting crops, etc.
Consumer loans are provided to individuals to cover urgent needs, repairs and purchase of apartments and houses.
Mortgage loans are issued against real estate for the purpose of construction, acquisition or reconstruction of housing.
Depending on the area of use, bank loans can be of two types: loans for capital investments and covering current needs.
Bank loans are also divided by terms of use into on-call (on demand) and urgent.
On-call loans are repayable within a fixed period after formal notification from the lender. Currently, this form of credit is practically not used in Russia, as it requires stable conditions in the loan capital market.
Term loans, in turn, are divided into short-term, medium-term and long-term. In modern banking Various forms of short-term credit are predominantly used.
According to collateral, loans can be unsecured (blank) and secured. Blank loans are issued to reliable borrowers, without the use of any form of loan repayment security.
Secured loans are the main form of bank credit. Depending on the type of security, they are usually divided into collateral, guaranteed and insured.
A secured loan is a loan that is secured in the form of collateral in cases where the collateral simultaneously meets the following requirements:
- 1. its real (market) value is sufficient to compensate the bank for the principal amount of the loan, all interest in accordance with the agreement, as well as possible costs associated with the implementation of collateral rights;
- 2. all legal documentation in relation to the bank's pledge rights is drawn up in such a way that the time required for the sale of the pledge does not exceed 150 days from the day when the realization of the pledge rights becomes necessary for the bank.
An undersecured loan is a loan that is secured in the form of collateral that does not meet at least one of the requirements for collateral for a secured loan.
An unsecured loan is a loan that does not have collateral or is secured in the form of collateral that does not meet the requirements for collateral for secured loans.
Based on the method of issuance, loan forms can be divided into loans of a compensatory and payment nature. A compensation loan involves sending loan funds to the borrower’s current account in order to reimburse expenses incurred from it. The essence of a payment loan is that the borrower, as necessary, provides the bank with the settlement and payment documents received by him, and the loan funds are transferred directly to pay for these documents.
According to the methods of repayment, loan forms are divided into loans repaid in a lump sum, and loans repaid in installments, repaid in a lump sum payment, are a traditional form of repayment of a short-term loan, since they are convenient from the standpoint of legal registration. Installment loans require repayment of the loan in two or more payments over the entire loan term. Specific repayment conditions are determined in the loan agreement and depend on the object of lending, the form of the loan, inflationary processes and a number of other factors.
Based on the types of interest rates, loan forms can be divided into loans with a fixed or floating interest rate. Loans with a fixed interest rate presuppose the establishment of an interest rate specified in the agreement for the entire loan period without the right to revise it. In this case, the borrower undertakes to pay interest at the agreed rate, regardless of changes in the capital market. IN Russian practice Bank lending predominantly uses fixed interest rates. Floating rate lending involves the use of an interest rate that is adjusted periodically. In this case, the interest rate consists of two components: the main rate, which varies depending on market conditions, and the premium, which is a fixed amount and determined by agreement on rates.
By size, bank loans are divided into small, medium and large. In banking practice, there is no unified approach to classifying loans according to this criterion. In Russia, a large loan is considered to be a loan to one borrower that exceeds 5% of the bank’s capital.
Thus, forms of credit are the external manifestations of a credit transaction.
credit market form resource
Classification of loan forms
Forms and sources of debt financing can be very diverse.
Definition 1
Loan forms- types of credit that arise from the essence of the credit relationship.
Loans can be classified according to the following criteria:
- nature of the value lent
- form of submission
- categories of lenders and borrowers
- directions of borrowers' needs.
Main forms of bank loan
A bank loan can be provided for the following purposes:
- financing the current activities of the enterprise (financing the replenishment of current assets)
- capital investments (implementation of investment projects)
- refinancing of previously taken loans
- financing of mergers and acquisitions (M&A, mergers and acquisitions), etc.
Loans to replenish the company's working capital– usually short-term (does not exceed one year). In most cases, receiving them does not take much time. Collateral in the form of fixed assets may not be required. Future revenues or highly liquid goods can serve as collateral. Such a loan is much easier to obtain for financially stable companies that care about their business reputation.
Receipt investment financing loan- a complex procedure. Capital investments usually require large funds over a long period. In this case, the provision of collateral is a mandatory requirement (regardless of the scale of activity, business reputation and even financial condition). As a separate area, we can highlight bank loans to finance investment projects that are launched from scratch.
Refinancing of loans taken out earlier implies obtaining the next loan for favorable conditions and subsequent repayment of debt (which was created by a loan raised on less favorable terms). Loan refinancing operations have, on the one hand, an objective basis (low interest rates). On the other hand, their active use is constrained by tight deadlines. This negatively impacts the efficiency and flexibility of such operations.
Financing of M&A transactions using loans- operations characterized by increased risk. Credit institutions, which issue borrowed resources for such purposes, often try to cover the risk through high interest rates and impressive collateral.
Loan and line of credit. Overdraft
When is it issued? credit, then the entire amount disbursed is reflected in the client’s bank account. Under the terms of the loan agreement, interest is accrued on it (the amount of which does not depend on the actual use of the allocated funds). The loan is provided by a one-time transfer of funds to a foreign currency or current account, or by their transfer to these accounts according to a pre-agreed schedule (indicating specific transfer periods in the loan agreement).
In case of line of credit on a loan account bank client the actual debt is reflected (that is, the borrower's funds used). Interest is charged on this debt. The bank sets a limit for the borrower credit funds within which he can use them. A line of credit can be revolving or non-revolving.
Overdraft- one of the forms of lending. In this case, the client is provided with a short-term loan (usually not requiring collateral), in excess of the balance in the current account, but within the established limit. The size of the limit largely depends on the credit history, bank liquidity and many other factors. An overdraft is characterized by a fairly high interest rate.
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