Financing systems


  • Providing economic resources
  • Financing economic development

Description

Managing the availability and distribution of financial resources to promote economic development.

Context

Financing systems are as old as commerce. The financing system is required by any commercial enterprise which chooses to operate beyond its internal capacity to generate funds or credit. The more recent context involves supra-national political agencies and supra-national financial institutions in the process of promoting economic development on a global scale.

Implementation

In this more recent context financial resources from both governmental and private sources are organized by the regulating agency or institution for delivery to requesting organizations whose projects or proposals satisfy the mandates and the criteria of these regulating bodies. In practise, the financial resources are delivered to users who would not qualify for access to other commercial or governmental financing systems.

Claim

  1. The cost of access to financial support depends upon its availability and the price others pay for the use of financial resources. The competition for both governmental and private financial resources may make this cost of access prohibitive to organizations promoting projects or proposals under conditions less favourable than those confronting their competitors. The strategy of financing systems aimed at economic development under these more severe conditions promotes broader development activity.

Counter claim

  1. Under the aegis of political bodies, supra-national, financing systems tend to distribute financial resources with some degree of political bias. This tendency may lead to some degradation in the process of economic development.

  2. Under the aegis of commercial corporate bodies, if transnational financing systems tend to distribute financial resources with some degree of economic bias. This tendency may lead to some degradation in the process of economic development of territories lacking the economic potential for selection.


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