An assessment of the role of commercial banks in promoting trade in rural areas: case study BPR S.A Kaduha sub-branch

2.2. The concept of Trade

According to BLACK, C., (2006:202), trade is defined as the business of buying and selling goods and services.

Trade is the exchange of goods and services for money. Once money is obtained, it may b e used to buy other goods that are needed (Nathan, K. 2010:142).

Trade is the transfer of ownership of goods and services from one person to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. Later one side of the barter were the metals, precious metals (poles, coins), bill, paper money. Modern traders instead generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.

Trade exists for man due to specialization and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations.

2.2.1. Types of trade

2.2.1.1. Electronic trade

Electronic trade operates in major market segments like business to business, consumer to business and consumer to consumer. In this type of trade, practitioners utilize the internet to product information, take orders, generate leads, and make customer databases. Electronic commerce or trade may be adopted more rapidly by the buyers of services and products such as information, photos or software.

2.2.1.2. Commodity trade

In commodity trade, commodities were things of value of uniform quality produced in large quantities by different producers and commodities price are determined as a function of their market as a whole. Basically, these are general resources and agricultural products such as crude oil, coal, sugar, soybeans, rice, wheat, silver and gold.

2.2.1.3. Barter trade

It is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable (e.g., hyperinflation or deflationary spiral) or simply unavailable for conducting commerce.

2.2.1.4. Retail trade

Retail consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy.