What is Finance and What is Financing


It's very important to just understand what Finance is when the word Finance is used and financing is also used what does it particularly mean what does it refer to. When we talk about Finance, Finance of the term is a very broad term. If you open up any dictionary you'll see numerous explanations of the word finance and we hear it all the time you know we see everywhere everybody knows Finance is something to do with the money we all know that when Finance is used money is involved whether you're getting the money or not there is some money involved


What is Finance

Finance is a broad term it describes activities associated with banking credit Capital markets Investments leveraging all these different areas finding the word Finance covers and to make it even simpler you could say that Finance is all about managing money in the process of the flow of funds that's Finance it's about money management that's why when we say Islamic Finance what does that mean it means money management in an Islamic way that's what Islamic finances and that's what the term actually signifies so when you talk about Islamic Finance it's all about managing money in a Sharia compliant way.


When we talk about conventional Finance it's about the use of money the deployment of money the management of money in a conventional way which would be interest-based so on and so forth so that's what Finance means.


What is Financing

When we talk about financing as a verb as a doing thing and financing is all about providing funds it's all about providing liquidity providing cash to businesses to Enterprises to Banks to individuals it's all about one party providing funds to another party which needs those funds so there's always a relationship between a number of people and one party is the borrower who's in need of finance and it will be paying on a deferred basis to the lender at a future date so that's what the act of financing is all about it's about providing cash and liquidity to somebody who requires it.


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