Tony is facing a financial crisis in his business. Instead of applying for a loan from a commercial bank, he takes a loan from the cooperative that he partly owns with some of his friends. This cooperative acts as a depository institution where all the members deposit their savings on a higher interest rate than that offered by commercial banks. Being a member of this cooperative, he gets the advantage of being charged lower interest rate on his loan. Based on the information given in the scenario, the cooperative owned by Tony and his friends exemplifies a(n) _____.

Question

Quizplus · Accepted Answer

The cooperative described in the scenario functions as a credit union, which is a member-owned financial cooperative that provides savings, credit, and other financial services to its members, often at more favorable rates than commercial banks.

Tony Is Facing a Financial Crisis in His Business