GRADE 9 Pre-technical – FINANCIAL SERVICES Quiz

Financial services are activities provided by banks, SACCOs, insurance companies and mobile money platforms to help people manage money, borrow, insure risks and send or receive payments.

A savings account protects money from theft or loss and usually pays interest, helping the entrepreneur grow savings for future needs.

A SACCO is a member-owned cooperative that pools members' savings and offers loans, often with lower interest and member-focused services.

M-Pesa is a widely used mobile money platform in Kenya that allows users to transfer money, pay bills and save or borrow through their phones.

Interest on savings is the extra money the bank pays you for keeping your money with them, increasing your total savings over time.

Loan interest is the cost of borrowing money; borrowers repay the original amount plus interest as fee for using the money.

Microfinance institutions provide small loans, savings and other financial help to low-income people and small businesses that are often unserved by regular banks.

Insurance transfers risk to an insurer; if an insured loss happens, the insurance can pay part or all of the cost so the business can recover.

A budget helps a business plan how much money it expects to receive and spend, which supports good decisions and avoids running out of cash.

Good records show incomes and costs, help calculate profit, support planning, and are needed when applying for loans or paying taxes.

Savings are usually low risk and liquid for short-term needs, while investments aim for higher returns but come with greater risk and may be less liquid.

Collateral (like land, a house or equipment) secures a loan; if a borrower defaults, the lender can sell the collateral to recover the money.

Taxes collected by the government pay for services and infrastructure that everyone uses, such as health, education and public safety.

Revenue (sales) is total income; profit is revenue minus all expenses. A business can have high revenue but low profit if costs are high.

A cheque instructs a bank to pay money from the account holder to a named person or business and can be used instead of cash.

Agent banking lets banks provide basic services like deposits, withdrawals and bill payments through local shopkeepers, improving access to financial services.

Some mobile loans have high fees or short repayment periods; borrowing without a plan can cause missed payments and higher debt costs.

Group lending involves members saving together in a table bank or rotating fund; members access loans and support each other, improving access to credit.

Registering a business helps it operate within the law, open formal bank accounts, apply for credit and benefit from government programs.

CRBs collect data on borrowers' repayments so lenders can decide whether to give loans, and responsible borrowing keeps a good record.

Inflation means prices rise; if interest on savings is lower than inflation, the real value of saved money falls and buys fewer goods later.

Diversification reduces the chance that one bad investment wipes out all savings by spreading money across several assets or business ventures.

Remittances are funds sent by migrants or relatives working abroad (or in other towns) to support family or pay for business expenses at home.

Fixed deposits lock money for a fixed term at higher interest; early withdrawal usually incurs penalties, unlike flexible savings accounts.

A good financial plan shows forecasted sales and costs, savings targets and loan repayment plans so the business can manage money and grow safely.