Author: KNEC notes and Past Papers

They stimulate competition with commercial banks over deposit and other credit markets hence stimulate efficiency in terms of improved services to borrowers in the financial market. They have enhanced the development of financial market through the introduction of great variety Read More …

This are institutions that address themselves to the financial needs of particular sectors of the economy which commercial banks have not been able to cater for adequately.the examples include; Development finance institutions – primary goal is to promote and aid Read More …

Spurring economic growth and development – investments being made by savings made by clients and others offered to businesses and individuals as loans. Currency and economic stability – it ensures that the value of a countrys currency is stable in Read More …

Issuance of currency – this is usually in notes and coins,in correct amounts to check on inflation. Acts as governments banks – i.e keeps governments accounts, manages government borrowing as well as a financial advisor to the government. Bankers to Read More …

COMMERCIAL BANKS – They are financial institutions that carry out commercial services,accept deposits from the public and advance loans.they are formed with the aim of making profit hence are trading businesses like any other. FUNCTIONS OF COMMERCIAL BANKS Accepting deposits-they Read More …

Banking  refers to all the activities carried out by financial institutions involving money.this financial institutions include: central bank,commercial banks and non banking financial institutions e.g. industrial and commercial development corporation(I.C.D.C). Some important terms in banking. Bank statements: This is a Read More …

Commercial banks do not cooperate fully within the central bank A government monetary system may be reduced or increased in size and controlled tightly without deleterious effects on its performance,however monetary system contains commercial banks that are in business for Read More …

This refers to the stock of monetary items that are in circulation in an economy at a particular point in time.these items basically consists of;total currency ie notes and coins issued by central bank and the total demand deposits.the following Read More …

Demand for money refers to the tendancy or desire by an individual or general public to hold onto money instead of spending it.it is also known as liquidity preference.money can be hold by individuals in various forms and these include;currency Read More …