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Institutions.
Finance Terms
• Finance: The proper management of money.
Classification of finance
Public finance
Private finance
Classification of finance
1. Public finance
• It studies the sources of funds of public authorities
such as states, local self-governments and the
Central Government.
• It is concerned with the income and expenditure
of public authorities and with the adjustment of
one to another.
2. Private finance
• An individual
• Profit-seeking business organizations
• External finance (outside sources)
• Direct financing (through issuing securities)
• Indirect financing (through middlemen)
• Internal finance (ploughing back of profits)
• A non-profit organization
Financial system
A set of institutions, instruments and markets which promote savings
and channel them to their most efficient use.
Primary Secondary
Capital Money
Markets Markets
Spot Markets:
Spot markets and future markets the terms that refer to whether
the assets are being bought or sold on the spot delivery or for
delivery at some future date. Such as six months or a year in future.
Money Markets:
Are the markets for short term, highly liquid debt securities.
Mortgage Markets:
Deals with loan and residential, commercial and real estate and on
farmland.
The Primary Market:
When a security is created and sold for the first time in the financial
marketplace, the transaction takes place in the primary market. It is
also known as Initial Public Offering (I PO)
The Secondary Market:
Once a security has been issued, it may be traded from one investor to
another.
Security Exchanges:
Security exchanges facilitate trading of stock or bond among investors.
Six basic functions of financial markets
Non Depository
Are financial intermediaries that do not accept
deposits but do pool the payments of many people in
the form of premiums or contributions and either
invest it or provide credit to others.
Pension funds,
Securities firms,
Government-sponsored enterprises,
Finance companies.
Types Of Financial Institutions
• Banks
• Savings & loan Associations
• Investment Companies
• Credit Unions
• Insurance Companies
• Mutual Funds
• Pension Funds
• Brokerage Houses
1) Banks
https://www.wallstreetmojo.com/investment-banking-in-philippines/
1.3) Investment Banks
2. IDBP
• Industrial Development Bank of Pakistan is one of Pakistan's oldest
development financing institution created with the primary
objective of extending term finance for investment in the
manufacturing sector and SME Sector of the economy.
1.7cont…) Specialized Banks
3. SME Bank
• however they are typically not allowed to take deposits from the
general public and have to find other means of funding their
operations such as issuing debt instruments. In India, most NBFCs
raise capital through Chit Funds.
2) Investment company
• Generally, an "investment company" is a company (corporation,
business trust, partnership, or limited liability company) that
issues securities and is primarily engaged in the business of
investing in securities.