Clerk: What are you going to do with the money?
Indian: I’m going to go into the city and sell my handmade jewelry.
Clerk: Do you have a collateral?
Indian: What’s a collateral?
Clerk: A collateral is something of value that can cover the amount of the loan. For example, do you have a car?
Indian: Yes, I have a 1949 Ford truck
Clerk: That won’t do. Do you have livestock?
Indian: Yes, I have a horse
Clerk: How old is it?
Indian: I don’t know, it doesn’t have teeth.
After some negotiations, the Indian and the clerk settle on a collateral. The clerk does all the paperwork and gives the Indian $500.
A few weeks later, the Indian returns to the bank, walks up to the same clerk, takes out a huge wad of bills and returns the loan.
Clerk: I see your jewelry sold well. What are you going to do with the rest of the money?
Indian: I will keep it in my wigwam.
Clerk: No need to do that. You can make a deposit in our bank.
Indian: What’s a deposit?
Clerk: A deposit is when you give money to the bank, the bank cares for it, and when it’s time, you can come back to the bank and take your money.
Indian: And what does the bank have as a collateral?