FINANCIAL

SERVICES

it includes all activities involved in the transformation of savings into investment. . the term financial services means mobilization and allocation of savings. Thus. In a broad sense.” Meaning: All types of activities which are of financial nature may be regarded as financial services.DEFINITION “Products and services offered by financial institutions for the facilitation of various financial transactions and other related activities.

Transforming risk (reducing it through aggregation and enabling it to be carried by those more willing to bear it).FUNCTIONS OF FINANCIAL SERVICES • • • • • Facilitating transactions (exchange of goods and services) in the economy. Mobilizing savings (for which the outlets would otherwise be much more limited). Monitoring managers (so that the funds allocated will be spent as envisaged). . Allocating capital funds (notably to finance productive investment).

IMPORTANCE OF FINANCIAL SERVICES Economic Growth Promotion of savings Capital Formation Employment Opportunities Increase in GDP Provision of Liquidity .

TYPES OF FINANCIAL SERVICES • • • • Venture Capital Banking Services Asset Funding Credit cards Provision of Funds • • • • Credit Rating Project Appraisal Business Advisory Financial Planning Consultancy Services • Portfolio Management • Mutual Funds • Merchant Banking • Insurance • Project Preparatory Services • Export Credit Guarantee Managing Investable funds Risk Financing • Stock Market operations • Money Market operations • Registrar • Merchant banker • Equity and Market Research • Trainings • Investor Education • Information Services Market Operations R&D .

CLASSIFICATION OF FINANCIAL SERVICES Fund Based Underwriting Mutual Fund Venture Capital Lease Financing Housing Finance Bill Discounting Non Fund Based Credit Rating Merchant Banking Loan Syndication M&A Portfolio Management Financial Planning .

CHALLENGES FACED IN FINANCIAL SERVICES SECTOR Lack of Availabl e data Lack of Transpa rency Lack of Qualifie d Personn el Lack of efficient Risk Manage ment System Lack of Investor Awaren ess Lack of Speciali zation .

)..g. “YOUR IDEA. real estate etc. infrastructure. OUR MONEY” . It is a means of equity financing for rapidly growing private companies. It thrives on the concept of high risk high return. • Venture capital is the money and resources made available to start up firms and small business with exceptional growth potential (e. IT. • Money is invested in such enterprises because these have high growth potential.VENTURE CAPITAL Venture capital refers to “capital investment in a new and risky business enterprise”. But at the same time. it a the strong potential for the growth. It is fundamentally along term risk capital in the form of equity finance for the small new ventures which involve risk.

STEPS IN VENTURE CAPITAL .