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