economic impact of credit management

Effective credit management helps individuals and businesses make informed borrowing and lending decisions. It reduces the risk of unpaid debts, which can lead to financial losses and higher costs for everyone involved. Good credit management also promotes responsible borrowing, maintaining healthy cash flow, and supporting overall economic stability. When credit is managed well, it encourages trust among lenders and borrowers, fosters investment, and supports economic growth. Conversely, poor credit management can cause defaults and financial disruptions, impacting not just individual entities but the broader economy.