You probably know a little bit about banking. You know that if you open a savings account at a bank, that the bank pays you interest. That's because banks don't compound interest only once a year. They do it much more often. This makes a bit of a difference.
Banks lend money to people.
All kinds of people. Butch and Twinkie Nelson, for example, are a newly-married couple. Of course not. They clearly need to borrow money. So they borrow from a bank.