Roles of non-bank financial institutions

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  • They stimulate competition with commercial banks over deposit and other credit markets hence stimulate efficiency in terms of improved services to borrowers in the financial market.
  • They have enhanced the development of financial market through the introduction of great variety of financial instruments e.g. investment deposit account,mortgages deposit account.
  • Offer services beyond the scope of the commercial banks
  • Through its expansion,it has created an additional vehicle for the more effective execution of the government monetary policy.
  • Helps in purchasing of durable consumer and capital goods through hire-purchase houses.
  • They provide financial advice to their client.
  • Offer credit facilities to risky borrowers at higher rate of interest.
  • Offers financial advice to various individuals and institutions in an economy.
  • Increase employment facilities which leads to full employment due to the increased demand.



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