Formal versus Informal Finance Essay Example | Topics and Well Written Essays - 1250 words

Formal versus Informal Finance - Essay Example 18). This discourse delves into the firm financing patterns and growth in China. In the end, the paper finds that very few firms as well as companies rely on formal banks to finance their business, leaving most of them to depend on informal sources to drive up capital for their businesses. Furthermore, the author of this paper discovers that although, few businesses rely on formal sources of finance, such sources are responsible for faster growth of a business company compared to informal sources of finance. Some of the vices identified are corruption. However, there was no evidence to prove that such a vice affected the allocation of credit to firms from the financing institutions. It also did not affect the performance of the business both in the market and in terms of profit making. This paper presents a counter argument on the positive relationship between finance and growth using China’s economy as a case study. Analysis of the Relationship between Finance and growth Econ omists concur on the fact that China has the fastest growing economy in the world. The Chinese economy has gained significance that no other economy can ignore its rate of growth. Pundits believe that the Chinese economy will surpass the size of the US economy by the time we get to the third decade of the current century (Yao & Yueh, 2009, p. 40). Professionally though, its per capita income level will remain very low compared to that of the United States. In some other quarters experts dismiss this predictions as misleading citing various facts. The strength of the China’s economy for instance, appears in its manufacturing sector that is so far challenging manufacturing sectors in advanced economies around the world. This is profound especially in economies that are labor intensive (Angelina, 2008, P. 76). China is also undertaking a top-down approach while entering the high technology industry. This means that the rate at which such an economy accelerates is high and will h it its peak very soon. The growth of technology receives maximum support form high-level research by a large of scientists as well as engineers finishing their undergraduate and postgraduate courses. China is an essential counterexample to findings in various fields among them institutions, law, growth of literature, and finance (Pagano, 1993, p. 619). This is despite the fact that it has very poor financial systems and legal structures. Its economy defies all these to become the fastest growing economy in the world (Patnaik, 2011, p. 33). A lot of information from scholarly articles in the field of law and finance demonstrates that the growth of formal financial institutions relates closely to a faster growth of business organizations in addition to enhancing better allocation of resources (Yu, 1998, p. 79). Literature from these articles also considers the value and input by informal financial systems in the development of economies from developing economies. Informal financing as defined in the scholarly literature entails small, shorter, and unsecured loans. These sources of finance are restricted to the rural areas, households, agricultural financing and contracts, small entrepreneurial engagements, and individuals. The loans target the lower cadre of the market within the developing economies (Hsieh & Klenow, 2009, p. 21). The same appears in the developed economies but takes a different approach. In the US for instance,

MGT 5A1 Principles of Human Resources Assessment Task Specifications Essay

MGT 5A1 Principles of Human Resources Assessment Task Specifications On this module the formative activities (developmental, pr - Essay Example The role of human resource in managing the employees plays a major role in the success of the business (Fisher, et al, 1990). The department is thorough in the recruitment of employees and only goes for the best qualified individuals in the market. Hiring is on merit. The human resource of Barclays Bank Kenya effectively takes part in the strategic plan of the company through ensuring effective communication from the employer to employees on company objectives. Another way the human resource of Barclays Bank stands out is the effective way in which it handles employee problems. They easily voice their concerns to the human resource without fear of victimization. Another benefit Barclays Kenya stands out for in the market is the benefits employees receive by working there. The company maintains a great pension scheme to allow the employees receive a good pension during retirement. In addition, human resource fosters good relations with employees by working on employee welfare. The ban k holds an annual Family day to bring together the families of employees for a day of sports and fun. The bank also engages the employees in team building activities such as planting trees and offering community service. Human resource organizes community projects to allow employees give back to their communities. This gives employees a sense of pride and self realization by giving back to society. From the evident strong human resource management team in Barclays Bank Kenya, recommendations to other companies suggest that they borrow some of the strategies of the Bank to improve their own human resource departments. Barclays Bank is an international organization, and therefore has experience with several workers from various parts of the world and over a long period of time. Therefore, the human resource department of the company is mature in comparison to other companies. Many companies, especially in the developing world hire individuals based on prejudices such as ethnicity, nep otism, tribalism and discrimination. However, Barclays Bank Kenya, despite having its location in a developing company has a reputation of fairness in hiring as it takes employees based on merit only. Therefore, this practice ought to be adopted by many companies of the sort. A second recommendation that other companies ought to learn from Barclays Bank Kenya is the skill of listening to the opinions of employees. Many employees face harsh treatment and sometimes-unlawful dismissal due to airing of sensitive issues to management. However, the human resource ought to understand that employee opinion is fundamental in running a company and attaining the objectives. Complaints brought forward by employees require serious attention. Dismissing them as acts of rebellion by employees is naive and only leads to poor relations between employers and employees. Therefore, employee feedback requires encouragement, even if it incriminates the administration. Listening to employees reduces strik es, demonstrations and go slows. Therefore, other human resource departments ought to emulate the ethical behavior of Barclays Bank Kenya of listening to their employees and acting on the issues brought forth. In the long run, it promotes the success of the company due to encouraging good relationships between employees to the human resource department (Bianca, 2013). Companies receive recommendation to emulate the human resource practice of Barclays Bank