The banking and financial institution activity usually divided into two general things. First it is about how many saving do people have in bank and financial institution and the second is how to give loan to the people who need it. I didn’t understand about that concept when I was young. At the past moment I was confusing about how does the bank get money by giving interest to the people who open the saving account.
The mechanism of saving and getting loan is connected each other. Without saving from people bank won’t get source of money to be borrowed to the people who need it. What kind of loan do people need? Usually many people need short term loan which is intended to the borrower’s cash flow gap between pay days. This gap usually happened in the middle of period before we get payment for our job. We can call it cash loan because the loan is formed into cash
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