Financial Institutions Handout
Institutions
Banks
Credit Unions, Mutual Banks
Peer to Peer Lending
Payday Lenders
Explanation: What is it?
A bank is a financial institution that accepts deposits from the
public and creates credit. Lending activities can be performed
either directly or indirectly through capital markets. The
shareholders own the bank; you can borrow money from this
institution.
- A financial institution that accepts deposits from the
public and creates credit.
A credit union is a member-owned financial cooperative
controlled by its members and operated on the principle of
people helping people, providing its member’s credit at
competitive rates and other financial services. Have to pay a
fee to be a member.
- A cooperative financial institution that is owned and
controlled by its members
Peer-to-peer lending is lending money to individuals or
businesses through online services that match lenders with
borrowers.
- An online platform matches people with money to
invest with people looking for a loan.
A payday loan is a small, short-term
unsecured loan. A relatively small amount of money lent at a
high rate of interest on the agreement that it will be repaid
when the borrower receives their next wages.
- Businesses that lend customers small amounts of
money at high-interest rates on the agreement that
the loan will be repaid when the borrower receives
their next pay.
Example
Westpac, Commonwealth, ANZ, Nab, Suncorp
Sydney Mutual Bank, Police Credit Union,
Gateway Credit Union, SGE Credit Union Limited
Society One, MoneyPlace, Rate Setter, Harmoney
Nimble, Sunshine Short-Term Loans, Ferratum
Australia, Cash Doctors