Money & Financial System

Functions of Money
• Money is used as a medium of exchange
• Money is used to measure value
• Money is used to determine the exact value of
debt (also called deferred payment)
• Money can also be used as ‘store of value’
 Functions of Retail Banks
• Banks are used as a safe place to keep the
money
• Banks are used to transfer money for example
making payments through cheques and
receiving money through cash
• Banks are used to lend money for example
leasing and hire purchase
• Banks give advice about money management
• MONEY MARKET is concerned with depositing
or borrowing money for the period of less
than one year
• BUILDING SOCIETIES are mainly used to
provide finance for the purchase and
construction of a house by individuals