Tag: Business Finance
Role of Commercial Banks
-Commercial bank accepts money deposits and therefore provides a safe place for saving money. -Offering loans and overdraft to persons who need financial assistance. -Assisting customers to easily make payments through standing orders, current accounts and debit cards. Services offered by Commercial banks -Commercial banks provide advisory services to clients who wish to borrow a…
Functions of the Central Bank
-The Central Bank has the sole authority to issue notes and coins. -The Central Bank is a banker to the government as it keeps the government accounts. -It manages the national debt. -It is a banker to all banks as commercial banks must keep an account with the central bank. -A lender of last resort-The…
Relationship between the Central Bank and Commercial Banks
The Central Bank is the head of the financial system. All financial institutions including commercial banks are regulated and monitored by the Central Bank. All commercial banks must keep an account with the Central Bank. These balances are used for cheque clearing purposes between banks. Payments for cheques between banks are set off at the…
Strategies to Manage Personal Income
Subsequent to the deduction of taxes and other statutory payments the income earner must manage his money to maximize its use. He must exercise and develop habits of careful spending and saving techniques. A good money manager will budget. A budget outlines how much of an individual’s income is to be spent on his various…
Sources of Short & Long Term Financing
Short-term capital may be accessed through the money market. Institutions in the money market include commercial banks, merchant banks, credit unions and discount houses. Borrowers are required to repay within a short-term e.g. 1 to 5 years. Long –term capital may be accessed through building societies, the stock exchange, unit trust companies and development banks.…
Savings and Investments
Savings is defined as money set aside or not spent from ones personal income. Money saved is most effective in an interest bearing facility such as a commercial bank to keep up with inflation which reduces the value of money over time. Other forms of savings include, the credit union and partner (meeting turn, sou…
Stock Market
The stock market facilitates the trading of stocks/shares between buyers and sellers. The Stock Exchange is the governing body that overseas and regulates the activities of the stock market. Companies that wish to obtain capital to expand may offer shares for sale on the stock market. It is therefore essential to the expansion of businesses…