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Functions and Examples of Financial Intermediaries

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❶Financial markets are therefore important markets that have acted as the backup for firms in a global perspective.

Financial Intermediation Defined

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Looking for Economics Homework Help from trained experts? Forms; economics paper structure of homework will do my other business, graduate degree economics assignment help me. We provide economic homework writing services that will enable you understand underlying economics concepts and offer help in all your economics related. My Assignment Help provides, Excellent. Your email address will not be published. Leave this field empty. Definition of financial intermediaries A financial intermediary is a financial institution such as bank, building society, insurance company, investment bank or pension fund.

Examples of Financial Intermediaries 1. Insurance Companies If you have a risky investment. Credit Union Credit unions are informal types of banks which provide facilities for lending and depositing within a particular community.

Benefits of Financial Intermediaries Lower search costs. A bank can become efficient in collecting deposits, and lending.

This enables economies of scale — lower average costs. If you had to sought out your own saving, you might have to spend a lot of time and effort to investigate best ways to save and borrow.

Therefore, the bank can lend you the aggregate deposits from the bank and save you finding someone with the exact right sum. Lenders need to ensure that any person who wants the loan has a guarantor who is credit worth and also wealthy enough to pay in case of the default. Another issue that has to be checked on the side of the applicant is the interest rates charged by the banks or any lending institutions and the penalties in case of delayed repayment or default.

This will allow the applicant to make up his mind on whether or not to take the loan and accept the terms of conditions attached to such liabilities. Various measures must also be taken after the loan has been granted. One of these measures is to ensure that the loan is put to the use as reflected in the application.

Taking this measure is crucial since if the loan is not used for the purpose it was taken, there is a high risk that the person will default. Lending institutions should therefore sends the agents to check and ensure that the projects for which the loans were taken are implemented strictly. Another factor that should be taken is to create a relationships with the person who took the loan by giving him or her pieces of advice on how to use the money to meet the intended purpose.

This will ensure that the lenders follow strictly the progress of the loan lent to be able to make a decision whether one will default and make the necessary decision early enough to avoid the loss of the entire loan. Another factor that should be taken into consideration is to always remind the client of the day of the repayment in advance until the actual day so as to keep them on toes to repay the loan lent to them.

The issue is triggered by the letter of demand sent by local lender, DBS. The Bank solicitors sent the letter cancelling particular banking facilities granted to Jason Parquet Specialist. Jason Holdings is said to have guaranteed this repayment amount as said by the group in a filing to the local bourse. Jason Holdings is disputing this and has its board of directors seeking legal advice on a letter of demand. DBS has given Jason Holdings an ultimatum to repay the stated amount within a week. The solicitors of DBS bank has taken this step as a measure to safeguard the interest of the bank alongside the commencement of a legal proceedings as well as realization of any security.

The shareholders are subsequently stranded alongside potential investors since the may lose their investment. DBS should ensure that no more issuance of shares takes place in Jason Holdings by seeking a court order to this effect. The problems in issuing or lending can be dealt with based on the requirement for security or collateral.

Whereas many lending institutions require a proof of security, other lenders have waived this requirement and are taking risks to lend people loans even without interest. This has created a conflict and a problem among the lending institutions and hence making it even hard to access loans. However, it is required that loan applicants provide their securities. The problem is even further compounded the types of securities acceptable to the lending institutions.

This creates a problem since at one hand lenders would want to make a profit by granting loans while at the same time, their hands are tied on the choice of the security for loans to be issued. It calls for trust between the lender and the lender to give and repay the loan. This trust be very difficult to gain and hence derailing the issuance of loans even though people and organization could be in serious and genuine needs for these loans.

Another concept or theory is that of the interest rates. Higher interest rates are charged on loans which take a longer period to be paid. However, loans that are payable in short duration tends to attract low interest rates. On one hand, the lenders require that their loans be paid back with interest but at the same require to maximize on the interest paid. A problem arises where lender may fear that people may default if loans take longer time be repaid while at the same time they wish that should the loans stay for long and be paid eventually they will earn more.

Lenders on the other hand would wish to have adequate time to use the money before repaying. However, this desire is limited to the fact that they will pay much interest than they would do if they pay within a short period of time.

Another problem that exist based on the interest rates is the amount of the interest to be paid on top of the principal amount. Some lenders will issue loans without the collateral but charge high interest due to the high rates of defaulter whereas other lenders will tend to charge low interest as a motivation for repayment.

To the loan application they have to contend with the problem of high interest rates so as to benefit from the money they have received as loans.

The third concept is the issue or the theory of grace period. Lenders would want to minimize the grace period before one starts to repay the loans back whereas those who take the loan would advocate lengthy grace periods.

It is therefore a problem which may derail the duration within which a loan application is finalized. While lenders want shorter grace period as an assurance that they will receive their lent money, the loanees require lengthy period to reorganize and start paying for loans without feeling the heat of the loan. They first need to make some money out of the loan and remit it back to the business to make more profits so that at the time they start repaying of the loans, they already have the opportunity to remain stable without being disrupted in their operation for the continuity of their businesses.

Bread Talk group was founded in in Singapore as well has quickly stretched to be a unique everyday brand proprietor hence created a brand or place in the international phase with its bakery, restaurant, as well as food atrium footpaths. Currently, the company has almost one thousand outlets in seventeen locations and generates culinary magic for daily recipes which one savor, bringing together individuals with preference as well as tastes around the globe. The company has a staff strength of seven employees and runs over eight fifty bakeries.

The financial results of this Group alongside the stock information as well as share prices alongside the corporate presentation all display a successful company alongside its annual reports and circulars.

The Group is deeply committed to providing timely, accurate as well as concise financial information. The franchise of the Group is offers rewarding careers while making a material change to individuals in their societies. The franchise of the Group is offering satisfying careers whereas making an actual change to individuals in the societies. The Group quickly expand its franchise work as well as presently looking for well-matched enterprises to be part of its growing success.

The Group further looks forward to working with fervent and concurring partners to remain a force to reckon with in a global perspective. The examination and assessment of Financial System of Singapore reveals a well-regulated system. The stress test of the system shows that banks and insurers in Singapore are resilient to adverse macroeconomics situations. The crisis management as well as resolution component arrangements in Singapore are strong.

Singapore has the required legal framework with responsibilities and tools allocated among the public entities as well as robust organizations for information coordination and sharing. Explaining the types of financial products and services offered by financial intermediaries and their roles in the Singapore financial system which the business community can access. The insurance companies as intermediaries assist investors deal with a risky investment by issuing policies that enable the investors to insure against the risk of default.

The insurance company thus offer insurance and assist in spreading the risk of default to investors. Financial advisers offer specialist advice on the behalf on an investor thereby saving them understanding the details of the financial markets as well as utilizing time searching for the best investment.

The credit union which are informal kinds of banks offer amenities for lending as well as depositing inside a given community. Mutual funds or investment trust describes mutual investment schemes which pool the small savings of one investor and subsequently permit a large investment fund.

This makes small investors the beneficiaries of being part of the large investment trust which allow them benefit from small commission rates available to large purchases. Loans are one of the major financial product given to the clients. Financial institutions give loans to the traders to expand their business and in return get profits through the payment of interest rates.

Mortgages are also essential financial products issued to the clients. People and organization get mortgages and promise to pay in the future. Deposits are also financial products where the people are given an opportunity to deposit their money in the banks to earn interest on deposits.

People and organizations use this as the means of wealth creation. The Group has a family of eight thrilling brands which have altered the way one would view his everyday staples.

It has revolutionized the bakery since two thousand, where it conceits itself on savoring clients with its blend of exclusive ideas which have projected new food cultures traversing its restaurant, bakery and food atrium divisions. The Group seeks to revolutionize and undertake processes in a unique style as they instill imaginative differentiation in their retail notions thereby value creation for clients as well as deliver the food one loves.

The Group has gathered customer and industry tributes alike from an assembly of global organizations. How Bread Talk Group can access the financial systems through the use of financial markets, financial intermediaries and financial instruments to facilitate its business activities.

Bread Talk has the ability to access financial systems via financial intermediaries and markets, as financial instruments.

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