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    Module 4 - Non-Bank Financial Institutions

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    MICHELLE MILANA
    This document defines and provides examples of non-bank financial institutions (NBFIs) in the Philippines. It categorizes NBFIs into those with quasi-banking functions, such as finance companies, lending companies, investment houses, trust entities and securities brokers that provide banking-like services, and those without, such as insurance companies, microfinance institutions, pawnshops, remittance companies, mutual funds, venture capital/private equity firms and pension funds that offer specialized financial services. Government NBFIs that manage retirement funds and provide loans are also outlined. In summary, NBFIs supplement banks by offering tailored financial services and increasing competition in the market.

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    © All Rights Reserved
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    Module 4 - Non-Bank Financial Institutions

    Uploaded by

    MICHELLE MILANA
    256 views19 pages
    This document defines and provides examples of non-bank financial institutions (NBFIs) in the Philippines. It categorizes NBFIs into those with quasi-banking functions, such as finance companies, lending companies, investment houses, trust entities and securities brokers that provide banking-like services, and those without, such as insurance companies, microfinance institutions, pawnshops, remittance companies, mutual funds, venture capital/private equity firms and pension funds that offer specialized financial services. Government NBFIs that manage retirement funds and provide loans are also outlined. In summary, NBFIs supplement banks by offering tailored financial services and increasing competition in the market.

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    MODULE 4- NON-BANK FINANCIAL INSTITUTIONS

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    This document defines and provides examples of non-bank financial institutions (NBFIs) in the Philippines. It categorizes NBFIs into those with quasi-banking functions, such as finance companies, lending companies, investment houses, trust entities and securities brokers that provide banking-like services, and those without, such as insurance companies, microfinance institutions, pawnshops, remittance companies, mutual funds, venture capital/private equity firms and pension funds that offer specialized financial services. Government NBFIs that manage retirement funds and provide loans are also outlined. In summary, NBFIs supplement banks by offering tailored financial services and increasing competition in the market.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    256 views19 pages

    Module 4 - Non-Bank Financial Institutions

    Uploaded by

    MICHELLE MILANA
    This document defines and provides examples of non-bank financial institutions (NBFIs) in the Philippines. It categorizes NBFIs into those with quasi-banking functions, such as finance companies, lending companies, investment houses, trust entities and securities brokers that provide banking-like services, and those without, such as insurance companies, microfinance institutions, pawnshops, remittance companies, mutual funds, venture capital/private equity firms and pension funds that offer specialized financial services. Government NBFIs that manage retirement funds and provide loans are also outlined. In summary, NBFIs supplement banks by offering tailored financial services and increasing competition in the market.

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    NON-BANK FINANCIAL

    INSTITUTIONS
    WEEK 4 MODULE 4
    Non-bank Financial Institutions

     Non-bank financial institutions (NBFIs) are entities that


    provide financial services but do not hold a banking
    license. NBFIs are a source of consumer credit (along
    with licensed banks).
     Non-bank financial institutions (NBFIs) can be
    categorized into two main groups based on whether
    they perform quasi-banking functions or not.
    Non-banks with Quasi-Banking Functions

    These are financial institutions that provide


    banking-like functions such as accepting
    deposits from the public and providing credit,
    but are not licensed as full-fledged banks.
    1. Finance Companies
     Provide loans and credit facilities to consumers and
    businesses.
     May specialize in areas such as vehicle financing, consumer
    loans, or small business loans.
    Examples:
    • BDO Leasing and Finance, Inc.: Offers vehicle financing,
    equipment leasing, and other financing solutions.
    • Toyota Financial Services Philippines Corporation:
    Provides vehicle financing for Toyota customers.
    • Global Dominion Financing Incorporated: Specializes in
    consumer financing and provides loans for various purposes.
    2. Lending Companies

     Specialize in providing loans to individuals and businesses.


     Offer various types of loans, including personal loans, salary
    loans, and business loans.
    Examples:
    • Cashalo: Offers digital lending services, including personal
    loans and salary loans.
    • Robocash Finance Corp: Provides short-term loans to
    individuals.
    • 24/7 Lending Group, Inc.: Offers online loans to individuals
    and businesses.
    3. Investment Houses
     Engage in underwriting securities, providing financial advisory
    services, and facilitating corporate finance activities such as
    mergers and acquisitions.
    Examples:
    • Philippine Equity Partners, Inc.: Engages in securities
    underwriting, financial advisory services, and investment
    banking.
    • First Metro Investment Corporation: Provides investment
    banking, securities brokerage, and research services.
    • AB Capital and Investment Corporation: Offers investment
    banking services and financial advisory.
    4. Trust Entities
     Manage trusts, estates, and other fiduciary arrangements on
    behalf of clients.
     Offer investment management services and act as custodians
    for assets.
    Examples:
    • BPI Asset Management and Trust Corporation: Manages
    trusts, estates, and investment portfolios for clients.
    • Philippine Trust Company: Provides trust and fiduciary
    services for individuals and institutions.
    5. Securities Dealers or Brokers
     These institutions facilitate the buying and selling of securities on
    behalf of clients, acting as intermediaries in securities markets.
     Examples:
    • COL Financial Group, Inc.: COL Financial is one of the largest
    online stockbrokers in the Philippines, offering trading services to
    retail investors. They provide access to stocks, mutual funds, and
    other investment products through their online platform.
    • First Metro Securities Brokerage Corporation: First Metro
    Securities is a subsidiary of First Metro Investment Corporation, one
    of the leading investment banks in the Philippines. They offer
    brokerage services to retail and institutional investors, providing
    access to stocks, bonds, and other securities.
    Non-banks without Quasi-Banking Functions

     These are financial institutions that do not perform


    traditional banking functions and are not licensed to
    do so. They may offer specialized financial services
    but do not accept deposits from the public or engage
    in lending activities typical of banks.
    1. Insurance Companies

     Provide various types of insurance coverage, including


    life insurance, health insurance, property insurance, and
    casualty insurance.
    Examples:
    • Philippine AXA Life Insurance Corporation: Offers life
    insurance, health insurance, and investment products.
    • Sun Life of Canada (Philippines), Inc.: Provides life
    insurance, health insurance, and investment-linked
    products.
    2. Microfinance Institutions (MFIs)
     Provide financial services such as microloans, micro
    savings, and microinsurance to low-income individuals
    and micro-entrepreneurs who lack access to traditional
    banking services.
    Examples:
    • CARD Mutually Reinforcing Institutions: Provides
    microloans, microsavings, and microinsurance to low-
    income individuals and micro-entrepreneurs.
    • ASA Philippines Foundation: Offers microfinance
    services to underserved communities.
    3. Pawnshops
     Offer collateralized loans to individuals in exchange for
    personal items such as jewelry, electronics, or watches.
     Provide other financial services such as money transfer
    and bill payment.
    Examples:
    • Cebuana Lhuillier: Offers pawnbroking services,
    remittance, bills payment, and microinsurance.
    • Palawan Pawnshop: Provides pawnbroking, money
    transfer, bills payment, and insurance services.
    4. Remittance Companies

    Facilitate the transfer of funds between individuals, often


    focusing on international remittances from overseas
    workers to their families back home.

    Examples:
    • Western Union: Facilitates international and domestic
    money transfers.
    • MoneyGram: Offers money transfer services globally.
    5. Mutual Funds
     Pool money from many investors to invest in securities such as stocks,
    bonds, money market instruments, and other assets. They are
    managed by professional fund managers who make investment
    decisions on behalf of the investors.
    Examples:
    • Philippine Stock Index Fund Corporation (PSIFC): PSIFC manages the
    Philippine Stock Index Fund, which is an index-tracking mutual fund
    that aims to replicate the performance of the Philippine Stock
    Exchange Index (PSEi).
    • First Metro Asset Management, Inc. (FAMI): FAMI is one of the largest
    mutual fund companies in the Philippines. It offers a variety of mutual
    fund products catering to different risk profiles and investment
    objectives.
    6. Venture capital and private equity firms

     Venture capital and private equity firms are types of


    investment firms that provide capital to businesses in
    exchange for equity ownership or ownership stakes.
     Venture Capital Firms: These firms invest in startups or
    early-stage companies with high growth potential. They
    typically provide funding to help these companies
    develop and grow their businesses
     Private Equity Firms: Private equity firms invest in
    established companies that are seeking capital for
    expansion, acquisitions, or other strategic initiatives.
    7. Pension funds
     are financial institutions that manage funds contributed by employers
    and employees to provide retirement benefits to employees after they
    retire.
    Examples:
    • Government Service Insurance System (GSIS): GSIS is a social insurance
    institution that provides various insurance benefits and pension programs
    to government employees. It manages pension funds and retirement
    benefits for government workers.
    • Social Security System (SSS): SSS is a social insurance program that
    provides social security protection to private sector employees, self-
    employed individuals, and voluntary members. It manages pension funds
    and provides retirement benefits to its members.
    • Pag-IBIG Fund (Home Development Mutual Fund): Pag-IBIG Fund is a
    national savings program and housing finance institution that provides
    affordable housing loans and savings programs to its members, primarily
    employees in the private and public sectors. It also manages a provident
    savings program that serves as a retirement fund for members.
    Government Non-bank financial institutions

     Government Service Insurance System (GSIS).


    Provides retirement benefits, housing loans personal
    loans, emergency and calamity loans to government
    employees.
     Social Security System (SSS). Provides retirement
    benefits, funeral benefits, housing loans, personal
    loans and calamity loans to employees who are
    working in private companies and offers.
     Pag-IBIG. Provides housing loans to both government
    and private employees.
     Non-bank financial institutions supplement banks in
    providing financial services to individuals and firms. They
    can provide competition for banks in the provision of
    these services. While banks may offer a set of financial
    services as a package deal, NBFIs unbundle these
    services, tailoring their services to particular groups
    THANK YOU

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