The function of credit, saving distribution costs, is manifested in. Saving distribution costs

The functions of credit, like any economic category, express its essence. They are objective in nature and show interaction with the external sphere.

1. Redistributive function. In a market economy, credit moves money capital from one area of ​​economic activity to another, providing the latter with higher profits. This redistribution process affects not only the value of gross product and national income, but also national wealth in certain periods.

The state must regulate credit relations in order to ensure the attraction of credit resources into production.

2. Function of saving distribution costs. By mobilizing temporarily released funds in the process of circulation of industrial and commercial capital, credit makes it possible to compensate for the lack of own financial resources of individual enterprises. An enterprise often turns to credit to provide itself with the required amount of working capital. As a result, the capital turnover of an economic entity accelerates. In general, savings in overall distribution costs are achieved.

3. Function of replacing cash with credit. Credit accelerates not only commodity circulation, but also money circulation, displacing cash from it. As a result of replacing cash with non-cash transactions, the mechanism of economic relations in the market is simplified and money turnover is accelerated.

4. Function of accelerating capital concentration. The development of production is accompanied by a process of concentration of capital. Borrowed capital allows the entrepreneur to expand the scale of production and additional profit. The concentration of capital, even on a small scale, brings positive economic results in Russian conditions.

5. Stimulating function. Credit relationships that involve the return of temporarily borrowed value with an increment in the form of interest encourage the borrower to use the loan more rationally and to conduct housekeeping more rationally when receiving a loan.

In the economic development of a country, credit plays a significant role, which is characterized by the results that appear during its functioning for all participants in society: individuals, business entities, and the state. It manifests itself in all forms of credit in different ways:

1) redistribution of material resources in the interests of developing production and sales of products when providing and mobilizing funds from individuals and legal entities;

2) impact on the continuity of production processes and sales of products;

3) participation in the expansion of production, when credit resources are used as a source of increasing fixed assets and capital costs;

4) acceleration of the consumer’s receipt of goods, services, housing using borrowed funds;

5) regulation of cash and non-cash money turnover. The Bank of Russia, being a monopolist in the field of issuing cash, organizes their circulation, and also manages non-cash payments made by the credit system, thus stimulating the entire production process.

Redistributive function. This function of credit is that the loaned value participates in the economic activity of the borrower, for whom this has undoubted advantages compared to other forms of resource mobilization, incl. own. The movement of loaned value makes it possible to satisfy the need for resources of some subjects of economic relations at the expense of the capital of others. The redistribution function of credit has a significant impact on structural changes in the economy. It leads to the concentration of capital in the most profitable industries and activities. Through a loan, both newly created value and previously accumulated material and financial resources in the state can be redistributed.

Control function. This feature means that the placement, use and repayment of the loan are controlled by the lender. Such control follows from the terms of the loan. Control is necessary when forming the lender’s loan portfolio, when using and repaying the loan, as well as when assessing the dynamics of the interest rate.

Emission function. Its content is to create credit means of circulation and replace cash. It manifests itself in the fact that in the process of lending, means of payment are created, i.e., along with money in cash, money in non-cash form is also included in circulation. The effect of this function is manifested when non-cash payments are made based on the replacement of cash. Real money is replaced by credit money.

The function of accelerating the concentration and centralization of capital. The credit mechanism promotes the process of transforming surplus product into capital and expands the boundaries of individual accumulation. To increase the scale of production, the funds of individual subjects are often insufficient, therefore scattered parts of their surplus product are accumulated in credit institutions and, having reached significant sizes, actively contribute to the process of expanded reproduction. In addition, the population's free funds are subject to concentration. The centralization of capital also plays an important role, as it contributes to the transformation of individual enterprises into enterprises of collective ownership. The globalization of the world economy leads to an increased role of international credit in shaping the structure of the economy, its specialization, and integration into the global system of division of labor.

Function of saving distribution costs. It is inherent in credit, which creates conditions for involving free resources of economic entities in money circulation. Cost savings are expressed in the fact that in the absence of the necessary funds to carry out any operation, an economic entity turns to the market in search of resources. Credit helps accelerate capital turnover and save public costs.

Thus, credit is a form of movement of loan capital.

Initially, loan capital represented a set of monetary capitals lent out on the terms of repayment for a certain fee in the form of interest. To understand the essence of loan capital, it is necessary to consider the sources of formation (Table 10.2).

Table 10.2

Functions of credit - concept and types. Classification and features of the category "Credit Functions" 2015, 2017-2018.

Credit functions:

Distributive / redistributive

Emission

Control

Accelerating capital concentration

Savings in distribution costs

Trade turnover service

Acceleration of scientific and technological progress

The role and place of credit in the economic system are determined primarily by the functions it performs, which are both general and selective.

First credit function- redistributive. In a market economy, the market for credit funds acts as a pump that pumps out temporarily free monetary resources from some areas of economic activity and directs them to others, those that provide a higher degree of profit. However, in some cases, the practical implementation of this function may contribute to increasing imbalances in the market structure.

It is for this reason that one of the most important tasks of state regulation of the credit system is the rational establishment of economic priorities and stimulation of the investment of credit funds in those areas or regions whose accelerated development is necessary in order to satisfy national interests, and not for the temporary benefit of individual business entities.

Second function of credit- emission - creation of credit means of circulation and replacement of cash. On the basis of credit, money is issued as a means of payment; the methods of credit expansion (expansion of credit) and credit restriction (narrowing of credit) regulate the amount of money in circulation. Helps to save cash flow costs; allows you to speed up the circulation of money and introduce progressive payment systems.

Third function of credit- control. This function of the loan is that during the lending process mutual control is exercised (both the lender and the borrower) over the use and repayment of the loan. In the economic literature, the control function of a loan is often considered only as the control activity of the lender (bank), which, in our opinion, is not entirely correct.

Control is part of the overall mechanism for managing the lending process. Today, any business entity cannot afford to neglect credit control. Successful credit management requires combining the efforts of credit control with the focus of business entities on making a profit from providing (receiving) a loan.

There is a significant difference in the performance of the control function of a loan on the part of the lender and on the part of the borrower. The lender has the opportunity to exercise control over both the object of the loan (the borrowed value) and the activities of the borrower. The borrower does not have the ability to control the activities of the lender; he exercises control only over the movement of the borrowed value (i.e., he controls only the object of the credit relationship).

Fourth function of credit- acceleration of capital concentration. The process of concentration of capital is a prerequisite for stable economic development; it is a priority goal of any economic entity. Real assistance in solving this problem is provided by credit funds, which make it possible to significantly expand the scale of production and in this way provide additional profit. Even if we take into account the need to allocate some part of the profit for settlements with the lender for raising loan funds, this option is more profitable in comparison with using exclusively one’s own resources.

Fifth function of credit- This is a saving in distribution costs. Its practical implementation stems from the economic essence of credit, the source of which is financial resources that are temporarily released in the process of circulation of commercial and industrial capital. Temporary gaps between the expenditure and receipt of financial resources of business entities may indicate not only an excess, but also a lack of financial resources. It is for this reason that loans to cover temporary cash gaps have become quite widespread.

Sixth function of credit- servicing trade turnover. During the implementation of this function, credit actively influences the acceleration of both commodity and money circulation, displacing cash from it. Using financial instruments such as checks, bills, credit cards in the sphere of money circulation, he replaces cash payments with non-cash transactions, which significantly affects the simplification and acceleration of the mechanism of economic relations in the international and domestic markets. The most active role in the process of solving this problem is played by commercial credit as an important element of modern trade relations.

Seventh function of credit- acceleration of scientific and technological progress. Today, scientific and technological progress is a determining factor in economic development. The role of credit in its acceleration can be most clearly traced through the example of the process of financing scientific and technical organizations, the main specificity of which is a larger time gap than in other areas between the first investment of resources and the sale of finished products and, accordingly, making a profit. It is for this reason that the normal operation of most scientific centers is unthinkable without the use of credit resources. Credit is just as necessary for the implementation of innovative processes in the form of introducing scientific technologies and developments into production, the costs of which are first financed by enterprises.

The place and role of credit in the economic system of society are determined, first of all, by the functions it performs, both general and selective. It should be noted that the functions discussed below relate to credit as a whole as an economic category and may not always coincide with the functions of specific credit institutions, whose activities are often determined by current market factors.

Rice. 6.1 – Credit functions

Redistribution function . In a market economy, the loan capital market acts as a kind of pump, pumping out temporarily free financial resources from some areas of activity and directing them to others, providing, in particular, higher profits. Focusing on its differentiated level in various industries or regions, credit acts as a spontaneous macro-regulator of the economy, ensuring that the needs of dynamically developing objects of capital application for additional financial resources are met. However, in some cases, the practical implementation of this function can contribute to deepening imbalances in the structure of the market, which was most clearly manifested in Russia at the stage of transition to a market economy, where the flow of capital from one sphere of production to the sphere of circulation assumed a threatening character, including with the help of credit organizations . That is why one of the most important tasks of state regulation of the credit system is the rational determination of economic priorities and stimulation of attracting credit resources to those sectors or regions, the accelerated development of which is objectively necessary from the position of national interests, and not solely the current benefit of individual business entities.

Function of creating credit funds and saving distribution costs . In the lending process, various means of payment are created to serve cash and non-cash forms of circulation, which influences the structure of the money supply, payment turnover and the speed of circulation of money. Real money is replaced by credit money. Various forms of credit money appear in circulation. This function depends on the level of development of commodity-money relations, on the monetary system itself and on the forms of money that are in circulation. Through a system of mutual offsets, debt claims and obligations, credit helps reduce the money supply in circulation. At the same time, credit contributes to the replacement of full-fledged money with credit, increasing the speed of money turnover, as a result of which distribution costs are reduced, and along with them, non-productive costs. Thus, the basis is created for expanding the scale of production and increasing the mass and profit margin.

Acceleration of concentration and centralization of capital . The process of capital concentration is a necessary condition for the stability of economic development and the priority goal of any business entity. Real assistance in solving this problem is provided by borrowed funds, which make it possible to significantly expand the scale of production (or other business operation) and thus provide an additional mass of profit. Even taking into account the necessary allocation of part of it for settlements with the creditor, attracting credit resources is more justified than focusing solely on one’s own funds. It should also be noted that at the stage of economic recession (and even more so in the conditions of transition to a market economy), the high cost of these resources does not allow them to be actively used to solve the problem of accelerating the concentration of capital in most areas of economic activity. Nevertheless, the function in question, even in domestic conditions, provided a certain positive effect, allowing us to significantly accelerate the process of providing financial resources to areas of activity that were absent or extremely undeveloped during the period of the planned economy.

Control function . As a rule, credit institutions provide loans to organizations and enterprises with a stable financial position. The content of this function comes down to monitoring the financial condition of the borrower in order to prevent untimely fulfillment of the undertaken obligations to repay the loan and interest on it. Throughout the entire lending process, compliance with all lending principles is monitored, allowing the lender to make decisions on issuing loans, tightening the lending regime, or early repayment of the loan.

Credit functions

The place and role of credit in the economic system of society are determined, first of all, by the functions it performs, both general and selective:

Redistribution function;

Saving distribution costs;

Acceleration of capital concentration;

Servicing trade turnover;

Accelerating scientific and technological progress.

Redistribution function

In a market economy, the loan capital market acts as a kind of pump, pumping out temporarily free financial resources from some areas of economic activity and directing them to others, providing, in particular, higher profits. Focusing on its differentiated level in various industries or regions, credit acts as a spontaneous macro-regulator of the economy, ensuring that the needs of dynamically developing objects of capital application for additional financial resources are met. However, in some cases, the practical implementation of this function can contribute to deepening imbalances in the structure of the market, which was most clearly manifested in Russia at the stage of transition to a market economy, where the flow of capital from the sphere of production to the sphere of circulation assumed a threatening character, including with the help of credit organizations. That is why one of the most important tasks of state regulation of the credit system is the rational determination of economic priorities and stimulation of attracting credit resources to those industries or regions, the accelerated development of which is objectively necessary from the position of national interests, and not solely the current benefit of individual business entities.

Saving distribution costs

The practical implementation of this function directly flows from the economic essence of credit, the source of which is, among other things, financial resources temporarily released in the process of circulation of industrial and commercial capital. The time gap between the receipt and expenditure of funds of business entities can determine not only an excess, but also a lack of financial resources. That is why loans to replenish a temporary shortage of own working capital have become so widespread, used by almost all categories of borrowers and providing a significant acceleration of capital turnover, and, consequently, savings in overall distribution costs.

Accelerating capital concentration

The process of capital concentration is a necessary condition for the stability of economic development and the priority goal of any business entity. Real assistance in solving this problem is provided by borrowed funds, which make it possible to significantly expand the scale of production (or other business operation) and, thus, provide an additional mass of profit. Even taking into account the need to allocate part of it for settlements with the creditor, attracting credit resources is more justified than focusing solely on one’s own funds. It should be noted, however, that at the stage of economic recession (and even more so in the conditions of transition to a market economy), the high cost of these resources does not allow them to be actively used to solve the problem of accelerating the concentration of capital in most areas of economic activity. Nevertheless, the function in question, even in domestic conditions, provided a certain positive effect, allowing us to significantly accelerate the process of providing financial resources to areas of activity that were absent or extremely undeveloped during the period of the planned economy.

Trade turnover service

In the process of implementing this function, credit actively influences the acceleration of not only commodity circulation, but also money circulation, displacing cash from it, in particular. By introducing instruments such as bills, checks, credit cards, etc. into the sphere of monetary circulation, it ensures the replacement of cash payments with non-cash transactions, which simplifies and speeds up the mechanism of economic relations in the domestic and international markets. The most active role in solving this problem is played by commercial credit as a necessary element of modern trade relations.

Acceleration of scientific and technological progress

In the post-war years, scientific and technological progress became a determining factor in the economic development of any state and individual business entity. The role of credit in its acceleration can be most clearly observed using the example of the process of financing the activities of scientific and technical organizations, the specificity of which has always been a greater time gap between the initial investment of capital and the sale of finished products than in other industries. That is why the normal functioning of most scientific centers (with the exception of those receiving budgetary funding) is unthinkable without the use of credit resources. Equally necessary is credit for the implementation of innovative processes in the form of direct implementation of scientific developments and technologies into production, the costs of which are initially financed by enterprises, including through targeted medium- and long-term bank loans.

So, a loan is an economic relationship that arises between a lender and a borrower regarding the value transferred for temporary use.