CFS Finance, its full name Community Financial Service, refers to the development of community financial business and the provision of financial services to the community public. As for community finance, it can be defined as all activities including all financial (banking, securities, insurance) needs generated by the community public and its organizations and the conducts financial institutions such as banks meet their needs. Let’s dive in to see more about why CFS Finance emerges and thrives.
Why CFS Finance Emerges?
The emergence of “community finance” is to adapt to the individualized and diversified development of social economy and life. “Community” is defined in “Cihai” as follows: a social group based on a certain area. Since people cannot live without banks and financial services in their daily lives, the community becomes gradually a large or small financial institution to fulfil citizens’ needs. The business market is also where banks make differences.
Different from the “community bank” on normal definition, community finance effectively integrates the well-supply and needs of banks, developers and community owners, and can provide full-featured service banking business and meet their needs in banking, securities and other businesses. It can also deal with protection and other aspects of the needs, such as Pengxing to provide corporate love, settlement, foreign exchange business and various savings deposits for homeowners, consumer competition credit, family management, and collection and payment and other online fox businesses.
In summary, the reason why community finance is emerging and thriving is mostly out of need and convenience it applied.
Business Contents of CFS
First of all, to serve for the convenience of residents’ life, such as collecting water and electricity bills, telephone bills, representing for non-tax income, paying traffic fines, etc.
Second, develop and sell wealth management products to help community owners increase their wealth.
Third, go into the community to lecture on financial knowledge and services, so as to enrich property activities.
Fourth, set foot in e-commerce and build an “almighty” electronic service network which allows online banking, mobile banking, telephone banking, and SMS banking in the community running on it.
Before the community financial service works its function, community financial service organizations is previously required. Specifically, the organizations should have the following basic characteristics.
First, the business operation area is mainly in various specific areas, which can be either a province, a city or a county, or an area inhabited by urban or rural residents, and cross-regional operations are rarely conducted. By taking root in the community and serving community residents, it can obtain a sustainable and stable source of profit.
Second, the service targets are mainly individual residents in the community. In addition, it also provides funds, guarantees, insurance and other support for individual enterprises and small enterprises in the community.
Third, the organizational form is mainly represented by banking financial institutions, as well as other microfinance enterprises mainly providing funds.
Fourth, it mainly provides various retailing financial products or services for community residents or small economic entities. Based on the characteristics of costumers, it also develops the products which can fulfil the need of specific customers. The conduct fully meets the diverse financial needs of community entities.
Brief Introduction of 3 Major CFS Organization Cases
Let’s go through 3 major CFS organization cases to see how community financial services applied in the life.
Community Banks of America
The number of banks per capita in the United States exceeds that of other developed countries, and the vast majority of which are community banks. The origins of American community banks can be traced back to colonial times and were established by merchants or farmers in immigrant communities.
Compared with big banks, it has its unique advantages. Its main features include: having a unique regional business position; serving residents and small and medium-sized enterprises, and being able to form a good interaction with customers; Information advantages and network advantages, good at engaging in relationship loans; able to obtain a large number of stable core deposits from community residents. The role of community banks for small businesses, agriculture and individual customers is very clear.
Rural Credit Cooperatives in Germany
Due to the characteristics of small amount of rural credit, scattered spatial distribution, and complicated procedures, the cost of loans is relatively high. To save these costs, farmers formed such organizations by themselves.
The biggest feature of the German community financial system is its “bottom-up” organizational system. That is to say, first set up land mortgage credit cooperatives in various places, and then develop upward to establish joint cooperative banks.
Grameen Bank of Bangladesh
It’s an institution that issues micro-loans, and the group and its founder won the 2006 Nobel Peace Prize. After the severe famine in Bangladesh in 1974, he started microfinance for poverty alleviation. Grameen Bank of Bangladesh issues micro-loans to the poor, especially poor women, and do not require guarantees. Grameen Bank of Bangladesh, as a global pioneer of microfinance, has made remarkable achievements in poverty alleviation and development, but there are still difficulties in achieving financial sustainable development.