The socio-economic essence of finance lies in the relations that occur between the state and other countries, individuals and legal entities for the distribution, formation and use of decentralized and centralized funds that are formed in funds.
The combination of monetary and distribution relations is the economic essence of finance, without which the circulation of production assets is impossible.
Financial relations based on the movement of the centralized money supply of state funds are distributed in the public sector and in government extrabudgetary organizations.
Finances carry out control and distribution functions.
The redistribution of state revenue is the distribution function of the state. When primary incomes appear, the concept of “national income” arises, which is divided among all participants into the salaries of workers in the manufacturing sector, the income of budgetary organizations, in order to fulfill their obligations to the state, banks and other lending organizations.
The state determines the socio-economic essence of finance, which works for the population and stimulates production.
Financial resources are carriers of monetary relations. Revenues and accumulations, which are formed by the state and business entities, are used in non-fund and stock forms.
An accumulative formation system, a separate existence, and targeted use are the hallmarks of financial funds. They are intended for depreciation fund and budget, to meet public needs.
One of the functions of finance is fiscal, with the help of which a part of income is withdrawn from business entities and the public to provide for the state apparatus, for defense needs, and for the non-productive sphere (archives, libraries, schools, museums, theaters). This means that it is also included in such a concept as the socio-economic essence of finance.
In the process of the state and various
financial organizations, there is an accumulation of funds, which can then be redistributed as loans and are sources of credit.
A loan is a financial transaction that allows legal entities and individuals to borrow money to buy material assets. There are several types of loans: bank, trade loans and credit cards, installments.
The concept and essence of credit is to solve the problems that face the country's economic system. Here the socio-economic essence of finance is concluded, for example, in issuing soft loans for affordable housing purchases. By accumulating free capital, a dynamic production process is ensured. It speeds up money circulation and provides various relationships: investment, insurance, contributes to the development and regulation of market relations.