Types of credit (commerce tutorial)

Short-term Credit

When short-term credit is offered, the amount involved is usually small and the credit period extends to no more than 1 year.

Informal Credit

  • Credit is given without any written agreement.
  • Does not involve collateral security.
  • Small amounts are involved.
  • Repayment is to be made within one year.
  • Usually offered by the retailers to their trustworthy customers.

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