In your own understanding, explain the importance of the financial institutions in our life.

Cite
real-life example/s of how financial institutions affect our daily life.

A penny saved is a penny earned. It’s usefuln to save money , money spent is goneforever.

Financial institutions serve as a funnel between those with surplus funds and those with
shortages of funds. Banks motivate us to save money through different programs and collect
our dispersed savings and after that they will distribute loans to different sectors to start a
business or a productive activity that can produce financial gain for them. There are common
situations where an individual or a business encounters lack of funds. For example, a
business owner has just started up his/her business a year ago and he/she needs extra funds,
instead of shutting down the business, he/she can request for a bank loan in order for the
business to continue its operation.

Financial Institutions can be banks or non-banks which includes insurance companies,

securities firms, mutual fund companies, finance companies and pension funds. These
financial institutions provide financial interest for deposits and they are the ones who manages
the flow of money in our economy.

Through financial institutions, businesses were able to run smoothly and manage its finances
and expenditures and can avoid financial problems Businesses provides our essential needs
through producing varieties of goods and services, through financial institutions, they