What is Finance- Definition & Meaning

Finance is a process of asking any financial institutions such as bank, credit union or finance company or another person to lend money to you that you also promise to repay this money at some point in the future. This is the normal speech of finance.

Actually, finance is a science that describes the management of revenues and the conduct or transaction of money matters and especially in the fields of banking and investment.

This is also hard!  to define finance easily... when you buy a car, if you don’t have enough cash money for buying this car then you went to the bank for borrowing money for this car. The bank will lend you money if you agree to pay interest to the bank. Now, there is no problem of buying your car.

In other words, financing is borrowing some money with the promise to repay that money with fee or interest over a period of time.

Now, we'll look forward to get definition of finance according to various authors...

L. J. Gitman quoted as, "Finance can be defined as the art and science of managing money. Finance is concerned with the process, institutions, markets and instruments involved in the transfer of money among and between individuals, businesses and governments."

E.W. Walker stated as, "Activities of a business concern relevant to financial planning, coordinating, control and their application is called finance."

Schall & Hally said that "Finance is a body of facts, principles and theories dealing with raising and using of money by individuals, businesses and governments. 


After analyzing above discussion and definitions of authors, we can define finance as...Finance is the application of financial planning for individuals, businessmen, financial institutions, social institutions and government in order to collect money from short term, mid term and long term convenient sources to ensure the actual investment, reserve, coordination and control according to that financial plan.

Actually, Finance can be defined as the art and science of managing money properly.