Financial essay: an example
Do you want to know how to write a financial essay? Here is an example for you on the role of financial institution on economic development.
We all know that most of our transactions today are channelized through banks and that the banking system plays a major role in the overall development of the economy. The efficient banking system means that people are facilitated in saving their earnings at a profit whereas many manufacturers and business people are given this amount to make money and contribute to the overall financial well being of the economy. These essays highlight the role of such financial institutions in developing economies through various means.
Banks help people save their money and earn interest on the saved amount. This saved amount along with the interest can be used by the individuals in making certain assets such as properties or investment in a business. Both help to add the gross domestic income of the economy such as through profits earned by the business or rental income received. On the other hand, many people have got amazing business ideas, but they cannot materialize it due to the lack of funds. These individuals can seek support in the form of loans from banks on a fixed amount of interest. This amount may be used to establish the desired business. Such new business creates employment on one hand and the other hand increases the sales of various other already established entities. For example, the business has to purchase raw material and other supplies to produce goods and services. it is, therefore, a chain development process.
Various specialized banks such as microfinance banks and those supporting the agriculture sector and farmers, small and cottage industries provide special assistance to the various sector and help them grow. The agriculture banks ensure that the farmers get a timely supply of seeds, fertilizers for various crops so that the agriculture produce is sufficiently prepared for local use and exports. If financial institutions do not support them, the economies will not be able to bring in foreign exchange through exporting the agricultural products. Sometimes banks also financially sponsor certain events that aim at promoting an economic activity or business such as job fairs, industrial exhibitions.
Their growth and progress are eventually helpful in flourishing the economies. The banking sector also plays a role in injecting money into the economy through foreign remittances. The international trade is not possible nowadays without the support of banking institutions. You can not import or export anything without engaging the financial institution. The documents and guarantees issued by the financial institution help establish trust between the trading partner, and hence a smooth deal is made. Nowadays people do not only work locally but provide services to the international level employers. How are their salaries being transferred? Certainly through banks. Take the example of writers sitting in Pakistan that you hire online for doing your homework and pay them through their banks. How would it have been possible to receive such services without a financial intermediary in the form of a bank? While availing the expert writing services, customers around the world ensure the credibility of the service provider by reviewing their profiles and then choose them. These reviews are easily available at various review sites such as paperell.com review or iwriteessays legit.
Hence, we can conclude that without the involvement of banks, the freelancing industry wouldn’t have crossed the national and international boundaries. It is, therefore, evident that a smooth banking system supported by a systemic centralized bank is important for the development of an economy.