Any business, no matter big or small, requires financial investment. Bharti Jogia Sattar, a promising in financial management says that finance is the life blood of any business and it is the base on which all operations are carried out. So, it’s sufficient to say that adequately investing their capital to get maximum benefits is the aim of any business. Keeping in light the above, below listed are some financial services:
- Financing: Financial services provided financing to companies or enterprises so that they can sustain, expand or even start their businesses. Without banks and other financial service providers, society will be leaning towards a biased form of infrastructure where only people who have money would get the opportunity to start a business. Thus, not allowing non- privileged people to even earn their daily income to sustain themselves.
- Facilitating Financial Transactions: Apart from just providing financing to enterprises, financial service providers also mediate the payment through means other than cash because not everyone uses cash as payment and the use of cash is becoming increasingly less as checks, credit cards and moreover, online payment systems are taking over as new means of fund transfer.
- Micro- financing: It should be noted that banks don’t precisely provide the type of financial assistance which small scale enterprises need. Micro- financing companies also empower individuals and small businesses, especially those which are not- banked, which means that they don’t qualify for a bank loan. It’s not uncommon for small or medium enterprises to unqualified for loans and here’s where micro- finance enters the fray by serving those who are not eligible to be serviced by banks either due to their qualification or location. These micro- financing entities are government initiatives or even other companies who fill the gap between the not- banked and the traditional finance sector comprising of banks. Micro- financing helps many in increasing or achieving economic development and financial independence.
- Minimizing Risks: Financial services like insurance companies provide protection from natural calamities as well as fluctuating business environments. It should be noted that insurance is not only a way minimize risks but it also aids in savings.
- Maximizing Returns: As per Bharti Jogia Sattar that availability of credit at a reasonable rate allows businessmen to get various credit facilities which in turn allow them to acquire assets. Factoring companies also allow the seller as well as the manufacturer a way to get profit increases due to increase in their turnovers. So even under competition manufacturers will be able to sell off their products at a lower profit margin and with more turnover stocks, the returns will be maximized.
- Benefits Government: Financial services allow government institutions to raise long and short term funds to meet capital and revenue expenditure. In addition, long term funds are also raised through the sale of government securities in the securities market which is a part of the financial market.
Thus, financial services are indispensable in this era of expansion. They help in not just personal economic growth but also in the national economic growth as a whole. These institutions make the gap between the haves and the have- not’s a little lesser.