Finance

Role of finance in the economic growth

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To fulfill the desire or a wish, it is important to have sufficient funds or finance. This could be either arranged within the family members or through finance providers in the market. not only do the individuals need the finance providers but, also the business firms need finance to get solved with their financial problems. There are several financial organizations available in the market to support the needy. 

How the business is developed?

 Any business that needs expansion of their business or to take it to the next level, they need capitals that they could easily borrow from the financial service providers that could lend the money based on interest rates. These interests may be a burden for the companies and they raise their funds by selling the shares or the stocks of their companies to the public and raise their capitals. The investors who invested in these shares will also be benefitted. All the government and the developed organizations follow this method to raise the capital or to meet up with their requirements and thereby the economic stability will be maintained and the government can function efficiently.

How the individuals get benefits from financial companies?

Several financial companies are there to provide loans or finance to individuals with their rules and regulations. These companies lend financial support to buy a car, home, and for other needs. an interest percentage will be collected for the amount lends and the duration of time will be spared to settle down the amount. The necessary documents should be provided to the finance company by the borrower to avail the finance facility. A mortgage finance facility is also available and where the client will pledge the documents of their assets and can get the funds for their use. Banks, financial companies, insurance companies, and all the other financial sectors offer finance and help the government and the society. 

What are all the types of finance available in the market?

The commonly available finance options are

    • Term Loan.
    • Line of credit/credit cards.
    • Peer-to-peer lending.
    • Friends and family.
    • Invoice financing.The concepts of the finance system include
    • Net worth.
    • Inflation.
    • Liquidity.
    • Bull market.
    • Bear market.
    • Risk of tolerance.
    • Asset allocation and diversification.
    • Simple interest.

All these aspects favor the financial management system that ensures the regular and adequate supply of the funds to the concern or the organization. It will also ensure the returns to the shareholders that depend upon the earning capacity, the market price of the share, and the expectation of the shareholders. It will also make sure of the optimum usage of the funds that are allotted.

Conclusion

The goal of the individual or the company can be meet up by proper financial planning. it acts as a guide and holds control over your income, expenses, and investment so that you could manage your flow of money and can reach your goals. Availing the facility of the finance at the right time also matters a lot in financial planning that determines the success history. Finance can be considered as the backbone of the economic strength of the society and helps in implementing development activities. 

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