Finance is the method by which money is disbursed from investors and savers to financial entities that require it. It is an investment-based market in which money is made to be invested to earn interest or dividends. The profits are then shared between the investors and the financial institutions or banks that lent the money. Finance deals with a wide range of entities such as governments, companies, schools, colleges, hospitals, and individuals. It affects all segments of the economy and the distribution of wealth is dependent on the amount of finance available. It also influences the pricing of goods and services.
Finance has three broad areas: public, financial sector, private financial sector, and capital markets. The public financial sector includes the central and local governments; the Fed, central banks; insurance companies; investment banks; and the commercial banks. The private financial sector includes individual savers, investors, corporations, banks, and other financial organizations.
A lot of investment is done in the capital markets through various financial institutions such as banks, brokerage houses, investment companies, hedge funds, mutual funds, and other investment vehicles such as real estate, bonds, equities, and derivatives. Financial institutions facilitate or broker finance to investors and corporations by providing credit facilities, making loans, offering financial products such as securities and derivatives, and buying and selling financial instruments. Financial markets include foreign exchange, insurance and bond markets, bond and stock markets, commodity markets, money management, and mortgage systems.
Finance graduates are prepared to research, design, and evaluate financial instruments. They can also be involved in specific businesses to test their theories and see how they interact with the business environment. Finance students can major in any of the four major fields of commerce and business: accounting, business administration, finance, economics, and information technology. Business administration emphasizes global economics, national and international business, regulations, and law and business strategies. Finance concentrates on business credit systems, budgeting, and financial solutions for companies.
The specialization in economics is closely related to the business management and planning fields of study because it studies market interactions and economic policies that affect private choices about investments, production, and consumption. Finance graduates can specialize in either business or personal economics, depending on which area of the subject they wish to specialize in. Private finance involves assessing and managing the financial assets of individuals and groups. Public finance concerns how public institutions and agencies spend public money. Lastly, social finance looks at the effect of individual and collective decisions on the economic well-being of society in general.
Several postgraduate programs are available at leading universities and colleges for Finance students. Students can choose to specialize in one or more of the four main areas of finance. Several institutions offer undergraduate and postgraduate degrees in Finance. Some of the well-known universities that offer Finance degrees are the University of London, King’s College London, Durham University, Goldsmiths, University of Nairobi, and King’s College London. Many good colleges also offer a wide range of financing and investment courses that students can complete after graduating. Some of these include Investment Management, Finance and Insurance, International Business and Financial Management, Principles of Corporate Finance, and Case Studies in Finance.