HAVELET FINANCE LIMITED

The finance and Economic development Progression There is strong evidence that access to finance is conducive to economic growth. This is a long-standing view in economics. As early as 1939, Joseph Schumpeter, one of the fathers of modern economic thought, highlighted the instrumental part played by banks in encouraging technological progress and economic development. The link between finance and growth is therefore relatively robust. However, the way in which finance is secured also matters. Finance can be accessed through external and internal sources. The former comprise capital inflows received from the rest of the world, while internal sources are the resources that an economy can muster on its own. Let me review both in turn. “The channels through which finance fastens growth include: Access to finance through external sources Over recent years we have witnessed a significant rebound in capital inflows, contributing to an acceleration in growth in emerging economies. Financia...

The capacity for self sustaining economic growth of any country can not be over emphasized This depends on the economic growth the country achieves over a period of time. Economic growth deals with investment and production and also the extent of Gross Domestic Product in a country. Only when this grows, the people will experience growth in the form of improved standard of living, namely economic development. The following are the roles of private finance in sustaining economic growth/development of a country. Savings-investment relationship To attain economic development, a country needs more investment and production. This can happen only when there is a facility for savings. As, such savings are channelized to productive resources in the form of investment. Here, the role of financial institutions is important, since they induce the public to save by offering attractive interest rates. These savings are channelized by lending to various business concerns which are involved in produ...

 Having comprehensively reviewed literature from multiple sources, it is established that financial markets have impact on the economic growth of a country. A financial market is a market in which people trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goods. Financial markets help to efficiently direct the flow of savings and investment in the economy in ways that facilitate the accumulation of capital and the production of goods and services. The combination of well developed financial markets and institutions, as well as a diverse array of financial products and instruments, suits the needs of borrowers and lenders and therefore the overall economy. Large financial markets with lots of trading activity provide more liquidity for market participants than thinner markets with few available sec...