Question

What is the difference between building societies and finance companies?

Please answer in details for each of the above two.

Answer 1

Differences between building societies and Finance Companies are as follows-

A. The major focus of Finance Companies to maximize the value for its external shareholders whereas building society is always working for their members.

B. Financial companies are generally paying dividend to their shareholders whereas building societies are not paying any kind of dividend to the shareholders.

C. Building societies are offering with higher rate of interest to the members whereas financial companies are generally offering with on lower return for the depositors.

D. Building society that generally operating on a smaller scale and regional bases where at financing companies are generally operating on a large scale and they even go multinational.

E. Services offered by building societies are highly customised nature various services offered by financial companies are standardized in nature.