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Sources & Types of Financial Services

There are four main categories of financial needs:

  • Money that you need after a short while, for which you will have to save small amounts for a short duration
  • Money that you will need at a later time, for which you will have to save small amounts for a long time
  • Money that you need immediately, which you will repay in small installments
  • Money that you need in case of an emergency or a disaster

 

For each need there is a corresponding financial service that you can access.

In some cases, the right approach may be a mix of a few different options. The option that is best for you and your household depends on your particular situation.

 

These financial options are services provided by individuals or institutions to help you better manage your money, by making it possible for you to save, invest or obtain loans. They belong to three categories: informal, semi-formal and formal financial services.

 

Types of Financial Services

Type

Description

Examples

Formal

 

Those institutions which provide financial transactions including loans and deposits; which are regulated and supervised by the State Bank of Pakistan. i.e. formal financial service providers report regularly to the government.

Commercial Banks

Micro-Finance Institutions

Insurance Companies

Informal

All financial transactions, loans and deposits occurring outside the regulation and supervision of the government‘s central banking authority. They include local moneylenders, pawnbrokers, self-help groups and non-profit organizations, as well as family members who contribute their savings to a microenterprise.

 

Local Money Lender

Pawnbrokers

Family Members

 

Semi-Formal

All financial transactions provided by institutions which are not regulated by banking authorities but are licensed and supervised by other government agencies. For example cooperatives, which are often supervised by a government bureau or agency in charge of cooperatives.

Credit Unions

Cooperative Banks