Role of Finance Companies

Role of Finance Companies Traditional role of Finance Companies The pay companies are much little in scale compared with commercial banks, and they are withal saddled with more restrictions which will be discussed later in the report. Traditionally, they relied on their personalized and flexible work to attract clients. This is because there are always consumers who are spurned by the commercial banks because adding these consumers to their portfolios would be uneconomical for these commercial banks as their economies of scale can non offset the transactional costs these clients would bring because of the small margins these smaller consumers bring. These mainly include people or companies who do non have the chapiter to meet the relatively higher capital requirements of the commercial banks compared to pay companies. One example would be the stream business account for companies. The major banks such as DBS and OCBC also offer low startup requirements, but charge a monthly management fee if their balances fall below $10,000 , not a big amount for businesses but possibly a stretch on new and small scale businesses. Hence, finance companies plug that gap with much lower balance requirements that would be more attractive to these business owners.

Another example would be home loans by which finance companies offer a wider guide of interest judge for a different range of pay needs compared to commercial banks who offer more generic rates on a whole. Emerging opportunities for Finance Companies Financial companies are however, now exploring new opportunities that they have not been able to benefit on before. For example, Hong Leong has recently been awarding underwriting rights by the MAS, a tralatitious stronghold of commercial banks. This has redefined the boundaries that a traditional finance social club in Singapore held due to regulations under the finance companies act. riches management, a relatively fast growing new plane section in Singapore,... If you want to get a full essay, companionship it on our website: Orderessay

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