Banks are institutions where financial transactions take place on a daily basis. These banks provide loans to their customers to purchase homes, cars, electronic goods, for travel and many more things. People require loans so that they can enjoy their lifes. In the last few years, banks have emerged as one of the biggest institutions to offer loans to people for a variety of purposes. Loans are also offered in lieu of stocks that are held by an individual in the stock market.
In earlier times when there were no banks people kept money in their homes. When banks came into service, people realised that money remained much safer when it was left with them and people realized that they were getting interest for their money. Banks in turn began to lend this extra money at a higher rate of interest to people who were in need of it.
Banks are flush with money, as more people have begun to save their earnings and leave them in the security of a banking institution. Flush with lots of money, banks are lending this money to people who require it at a higher rate of interest. Many businesses and companies need loans to help them grow and expand their business.  Banks and financial institutions in turn pay their customers a certain amount of interest for their deposits.
The World Bank is the biggest financial institution, which offers loans to many governments the world over to implement worthwhile projects in their countries. Many companies avail loans from investment banks to take care of mergers and acquisitions. To help these growing companies to acquire other smaller companies, investment banks provide bank loans.
As the needs and comforts of people began to grow, banks realized the potential of providing loans to those who require them.

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