3. Advantages of Banking

Availability of Cheap Loans

Before modern banks were established, people would borrow money from local money lenders, landlords, merchants or other wealthy individuals. These loans were given at exorbitant interest rates that most people couldn’t afford to pay, in the process the borrower would always remain in debt. It was a vicious cycle. Modern banks started providing cheaper loans to the underprivileged section of the society, breaking the whole expensive loans system.

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