Types and other forms of credit

We talked in the previous topic about the definition of credit and its components as well as the foundations on which to base the granting of credit, Below we will discuss Photos credit and types and functions in order to give a brief idea enables the non-specialist reader's understanding of the subject in a way leftwards.

Types of Credit

There are several types of credit according to number of basic standards generally accepted in the world of money, which can be summarized as follows:

First, the standard personal recipient credit, can differentiate between the two types of Ala, private clients and falls within this type personalities and natural Notional also, people and companies are privately owned, and the nucleus the other clients of the public sector, and here the state is the client has represented in any of the departments or sectors , the relevant authorities of any public property owned by the state.

 Second, the standard for credit

As it seems related to the extent of the name of the time credit granted by the bank to the customer, and is divided into short, medium and long term as follows:

1.    short-term credit, credit is given to some customers to finance ongoing operations, and is usually for a period of less than one year. 

2.    medium-term credit, the credit for this is usually between one and less than five years, and directs funding to operations medium-term as buying some goods such as cars and other for individuals or finance some capital transactions, such as access to some number and machinery. 

3.    long-term credit, which extends credit him for more than five years, exemplified by, those loans granted to projects in order to finance the needs of fixed capital.

Third, the purpose of the standard credit

It is divided into several types according to the purpose of the credit as follows:

1.    Commercial credit, and is usually a short-term projects usually resorted to in order to finance part of the capital this month.

Consumer credit, often have a medium-term and takes the form of sale of some of the seven installments.
Credit productive or investment is a long-term aim to finance fixed capital such as buildings, land, machinery and equipment, and is considered the bond is the right tool to get them, and while in Islamic economics, are regarded as instruments is the formula Islamic most preferred to finance such projects where no usury forbidden nor Benefits asthmatic unfair.

Fourthly standard guarantee debt

There are two types of credit, one of the so-called personal credit, which gives no guarantees in kind as properties, for example, projects or otherwise, According to this standard is credit without giving the debtor any kind of collateral to donor credit-sufficient only promise who took it upon himself discharged by the deadline , It should be noted here that this credit is not granted so pardon me for being who was without standards, but must for this trust to be based on criteria specific professional, where trust creditor or bank customer based on the personal debtor known has enjoyed a good reputation feared by the distortion If breach of its obligations later, this credit is called credit profile.

If the condition of the bank or creditor to the client researcher for credit that offers a guarantee in kind as properties or companies, for example, or any other property as collateral for the payment of his religion later called credit in kind or in-kind credit. It should be noted here that the value of the collateral must be greater than the value of the loan or the credit amount, and the difference between the two values ​​is called a margin of security, and the value of this margin varies depending on the type of collateral and the loan type and the nature of the surrounding circumstances and other factors.

Photos of some kind credit
Credit to ensure the goods, where the goods here are used as collateral for credit, and are required to have those goods are stored and insured of course.
Credit guarantee the securities, and here the customer is filed by the bank securities (stocks and bonds, for example) as collateral for the debt.

Credit secured promissory notes, and here offers the customer leaves his debt to other clients known to the bank, where the doctoring or endorsement of the bank as collateral for the credit, bills of exchange, for example, and drawn to the order of other people known to the bank can be accepted as collateral for credit.
Credit guarantees variety, there are many different types of credit could fall under this type, such as security salaries or project contracts with contractors where consistent Contractor with the bank to open a credit as a percentage of the value of construction operation, where a contractor to waive the bank for abstracts exchange bills or rights obtained, also falls within this type of credit such as (LC) for the export and import, where the customer the importer of the goods to open letter of credit in the bank for the benefit of the other party source in another state, and the bank granting the customer the credit needed to open a letter of credit, and so in exchange for a waiver from the client's bills of lading, and the release of imported goods after the payment of the credit.

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