Significance & Functions of the Finance Industry:
As mentioned earlier that the primary job of finance industry is to provide finances for other businesses. There lies the importance of the financial institutions. Even someone with very low amount capital can open a bigger business primarily because financial institutions are there to provide him the required amount of money for the business. But don’t get fooled. This is no charity. In lieu of the money the financial institution lends you they will take a guarantee from you which will be almost of the same value lend to you. They will also charge an interest on the amount you have lend form them over a period of time. This lending job is primarily done by banks. Other types of services performed by banks apart from giving loans are:
- Keeping individual money safe in individual accounts.
- Issuance of credit cards, debit cards & ATM cards to account holders.
- Provide for electronic or other types of fund transfers.
- Providing assistance in foreign exchange services etc
Apart from banks there are other types of financial institutions as well who provide specialised financial services to their clients.