lesson

1. TYPES OF NON-BANK
FINANCIAL
INSTITUTIONS
BANKING AND
FINANCIAL INSTITUTIONS
.
BSBA-FINANCIAL MANAGEMENT/2-3
UBARRE,RUBYLYN E.

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1. PAWNSHOP
A store or form of business that lends money to
consumers who carry valuable items to be pawned.
FUNCTION
• Pawnshops provide short-term loans to individuals in exchange for
personal items as collateral..
PURPOSE
• They serve people who need immediate cash but cannot access
traditional banking services. Pawnshops are particularly useful for
individuals with poor credit or those who lack access to other forms of
credit.

3. 2.SAVING AND LOAN COOPERATIVE
It is a cooperative which encourages its members to save money and
enables them the obtain loans they may require for various purposes
from their accumulated savings.
FUNCTION
• Savings and loan cooperatives, also known as credit unions, collect
deposits from members and provide loans and other financial
services.
PURPOSE
• These institutions promote thrift and provide affordable credit to their
members. They are often community-based and aim to serve the
financial needs of specific groups or communities.

4. 3.CAPITAL MARKET
Financial markets that bring buyers and sellers together to trade stocks,
bond, currencies, and other financial assets.
FUNCTON
• Capital markets facilitate the buying and selling of long-term
financial securities, such as stocks and bonds.
FUNCTION
• They help companies raise funds for investment and growth and
provide investors with opportunities to invest in a diverse range of
assets. Capital markets play a crucial role in allocating capital
efficiently within the economy.

5. 4.MONEY MARKET
Refers to trading in very short-term dept investment
FUNCTION
• Money markets facilitate the trading of short-term financial instruments,
such as treasury bills, certificates of deposit, and commercial paper.
PURPOSE
• Money markets provide liquidity to financial institutions and corporations,
allowing them to manage their short-term cash needs efficiently. They
also serve as a mechanism for the central bank to implement monetary
policy.

6. 5.VENTURE CAPITAL MONEY
A form of private equity and a type of financing for startup companies
and small businesses with long-term growth potential. Venture capital
generally comes from investors, investment banks, and financial
institutions.
FUNCTION
• Venture capital companies invest in early-stage and high-growth
potential businesses in exchange for an ownership stake.
PURPOSE
• They provide funding and expertise to startups and entrepreneurial
ventures, helping them grow and succeed. Venture capital firms play
a crucial role in fostering innovation and driving economic growth.

7. 6.INSURANCE COMPANY
A company that creates insurance products to take on risks in return
for the payment of premiums.
FUNCTIONS
• Insurance companies offer financial protection against the risk of loss
or unforeseen events by pooling premiums from policyholders.
PURPOSE
• They provide individuals and businesses with peace of mind by
mitigating financial risks associated with accidents, illnesses, property
damage, and other adverse events. Insurance companies help
individuals and businesses manage risk and protect their assets.

8. 7.Leasing Company:
Financial leasing companies engage in financing the purchase of
concrete assets.
FUNCTION
• Leasing companies provide financing for the acquisition of assets
such as equipment, vehicles, and machinery through lease
agreements.
PURPOSE
• They enable businesses to access essential assets without the need
for large upfront capital expenditures. Leasing companies help
businesses preserve cash flow and flexibility while acquiring the
necessary equipment for operations.

9. 8.FACTORING COMPANY.
specializes in invoice factoring, or purchasing outstanding invoices from
businesses that have slow paying customers and are lookingto boost cash
flow.
FUNCTION
• Factoring companies purchase accounts receivable from businesses at
a discount, providing immediate cash flow in exchange.
PURPOSE
• They help businesses improve their liquidity and working capital by
converting accounts receivable into cash. Factoring companies also take
on the risk of collecting outstanding invoices, allowing businesses to focus
on their core operations.

10. 9.Financial Technology (Fintech)
simplifies financial transactions for consumers or businesses, making
them more accessible and generally more affordable.
FUNCTION
• Fintech companies leverage technology to innovate and improve
financial services, such as payments, lending, investing, and
insurance.
PURPOSE
• They aim to increase efficiency, accessibility, and affordability of
financial services by leveraging technology and data analytics.
Fintech companies often cater to underserved or unbanked
populations and challenge traditional financial institutions with
innovative solutions.

11. 10.Pension Fund Company:
pension fund founded by a bank or life insurance company in order to
manage defined benefit pension plan for individuals of both employees or
independent workers.
FUNCTION
• Pension fund companies manage retirement savings on behalf of
individuals and invest those funds in various financial assets to generate
returns.
PUPOSE
• They help individuals accumulate savings for retirement and provide a
source of income during their retirement years. Pension fund companies
play a critical role in ensuring financial security for retirees and managing
long-term investment risk.