JAIIB | IE AND IFS | CASE STUDY ON HIRE PURCHASE

The JAIIB (Junior Associate of the Indian Institute of Bankers) exam covers important topics in the Indian Economy (IE) and the Indian Financial System (IFS). One such important area is Hire Purchase, a monetary method that allows businesses and individuals to acquire goods and assets by paying in installments while enjoying immediate use. Learning sessions brings this article on case study that explores the concept of Hire Purchase and its significance.

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Hire purchase is a method of acquiring assets where the buyer (hirer) agrees to make payments in installments while using the asset immediately. Ownership of the asset is transferred to the buyer only after the last installment is paid.

For the extensive preparation of candidates, get details through our YouTube videos for JAIIB IE & IFS Module wise Syllabus with explanations and tips to help candidates in their preparation journey.

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The key features of a hire purchase agreement includes the hirer who  makes a down payment or deposit, which is a portion of the total cost of the asset. The remaining balance is paid through regular installments, which include the principal amount and interest. Ownership of the asset remains with the seller or financier until the final installment is paid. The hirer has the right to use the asset throughout the duration of the hire purchase agreement.

Types of Assets Financed via Hire Purchase:

1. Consumer Goods
2. Machinery and Equipment: 
3. Vehicles
4. Industrial Equipment:

On the whole, Hire purchase plays a key role in the Indian financial system by offering businesses and consumers an economical means of obtaining assets through installment payments. This financing method sets up immediate asset use while spreading the cost over time, making it ideal for businesses with limited access to capital. As the Indian economy continues to grow, hire purchase is expected to remain a popular financing option, helping businesses expand and consumers access goods that would otherwise be out of reach. Learning Sessions provides additional information about JAIIB IE & IFS INFRASTRUCTURE INVESTMENT TRUST  by giving examples of real life scenarios.

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