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FINANCIAL

SERVICES

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

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).
Allocating capital funds (notably to finance productive
investment).
Monitoring managers (so that the funds allocated will be spent
as envisaged).
Transforming risk (reducing it through aggregation and
enabling it to be carried by those more willing to bear it).

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

VENTURE CAPITAL
Venture capital refers to capital investment
in a new and risky business enterprise.

Money is invested in such enterprises because these have high


growth potential.

Venture capital is the money and resources made available to


start up firms and small business with exceptional growth potential
(e.g., IT, infrastructure, real estate etc.). It is fundamentally along
term risk capital in the form of equity finance for the small new
ventures which involve risk. But at the same time, it a the strong
potential for the growth. It thrives on the concept of high risk high
return. It is a means of equity financing for rapidly growing private
companies.

YOUR IDEA, OUR MONEY

STEPS IN VENTURE
CAPITAL