Business Finance

1. Explain the different types of financial institutions.

2. Justify the importance of financial institutions.

Students would be familiar with the topic – Establishing a Business and Legal Aspect of Business.

Insurance companies are an example of non-banking financial institutions. Quite apart from the service insurance companies provide to businesses and individuals to give compensation in the event of losses experienced, all businesses need capital and give compensation in the event of losses experienced, all businesses need capital and insurance is a source of business capital. Insurance companies lend large amounts of money to borrowers.

Building societies

A building society is a non-banking financial institution, owned by its members, that offer banking and other financed services, especially mortgage lending.

Micro-lending agencies

Micro-Finance is recognized as a tool to alleviate poverty that is aimed at millions of people who do not possess access to traditional banking facilities because typically, they lack collateral or are too poor, illiterate, unemployed or have a poor financial record. They lend small amounts of money to such persons which not only helps them to survive, but also aims to encourage self-sufficiency and independence as well as self-employment and entrepreneurship. 

Government Agencies

Government agencies, often an appointed commission, are responsible for the oversight of specific functions for the government. For example, there may be a Ministry of Education and a Ministry of Transport.  

Whitcomb, Alan Dr. (2018). Essential Principles of Business for CSEC. Fourth Edition. Hoddle Education.