Credit refers to an agreement in which a lender supplies the borrower with money, goods or services in return for the promise of future payment. Cheap and affordable credit is important for development: 1. Less income: If the interest is too high, then much of the income of a person would go to repay the credit. This would mean less income would be left to the person to spend or invest. 2. Debt trap: Sometimes the interest rate is so much that the repayment amount is higher than income. This forces the person to lend more and they fall into a debt trap. 3. Lack of money to start venture: If the lending rate is too high, it discourages people from borrowing to start a venture and they end up not investing in a business. 4. Expanding production: If the credit is cheap, then people can lend for a variety of reasons and this shall give them a way to increase production like buying a new piece of land.