• TRADITIONAL FINANCIAL INSTITUTIONS
    ECONOMICS

    TRADITIONAL FINANCIAL INSTITUTIONS

    The traditional financial institutions came into existence several years before the establishment of modern banking system in many countries in the West African subregion. It involves the coming together of a group of people with common interest in the same place of work or community who mutually agree to pool their resources together in order to save, lend and manage money. These traditional financial institutions usually take the form of cooperative societies known as credit and thrift co-operative societies, which are given different names in different places, e.g. “ESUSU” or “NSUSU” in Yoruba, or “ETIO-UTU” in Igbo. It takes the form of association of people in the village, office, market,…

  • MEANING OF FINANCIAL INSTITUTIONS
    ECONOMICS

    MEANING OF FINANCIAL INSTITUTIONS

    Financial institutions refer to all business organisations which hold money for individuals and institutions and may borrow from them in order to give loans or make other investments. Financial institutions are very important for the economic development of a nation. They represent the main channel or medium by which funds can flow from lenders to borrowers.   TYPES OF FINANCIAL INSTITUTIONS Financial institutions may be divided into two major groups – banking and non-banking financial institutions. The major difference between the banking and the non-banking financial institutions is that the liabilities of the banking institutions are counted as part of the total supply of money while those of the non-banking…

  • INSTRUMENTS OF BUSINESS FINANCE
    ECONOMICS

    INSTRUMENTS OF BUSINESS FINANCE

    Instrument of business finance also called Financial Instrument is a physical or electronic document that has intrinsic monetary value or transfers value. For example, cash is a financial instrument. Listed and unlisted securities, loans, insurance policies, interests ina partnership, and precious metals are also financial instruments. A contractual obligation is also a financial instrument as a deed that records home ownership.   SOURCES OF FUND FOR BUSINESS Funding is the act of providing resources, usually in form of money (financing), or other values such as effort or time (Sweat equity), for a project, a person, a business, or any other private or public institutions. The process of soliciting and gathering…

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