| dc.description.abstract | The Non-Banking Financial Institution (NBFI) sector represents one of Bangladesh's most dynamic
growth industries, with 36 institutions playing an integral role in the Economic Development of
Bangladesh. Consequently, rigorous financial performance analysis is paramount for NBFIs
navigating this competitive landscape. This summary highlights the key contributions of NBFIs to
economic development.
Financial Inclusion:
NBFIs are instrumental in promoting financial inclusion by providing access to financial services
for underserved populations. Microfinance institutions, for instance, enable small-scale
entrepreneurs, particularly women, to secure funds for starting or expanding businesses, thereby
contributing to poverty alleviation and economic empowerment.
Diversification of Financial Services:
By offering a variety of financial products, such as investment opportunities, insurance, and credit
facilities, NBFIs diversify the financial landscape. This diversification helps mitigate risks
associated with reliance on traditional banks, ensuring a more stable financial environment.
Mobility of Capital:
NBFIs facilitate the efficient allocation of capital within the economy. They channel savings from
households and businesses into productive investments, supporting infrastructure development,
industrial growth, and technological advancements.
Risk Management:
Through insurance products and derivatives, NBFIs provide mechanisms for risk management,
which is crucial for both individual and corporate entities. This aspect fosters a culture of
entrepreneurship, as businesses feel more secure taking risks with their initiatives.
Alternative Funding Sources:
NBFIs offer alternatives to traditional bank loans, improving access to funding for small and
medium enterprises (SMEs). By providing venture capital and private equity, they support
innovation and the growth of start-ups, which are essential for job creation and economic
dynamism.
Economic Stability:
A robust NBFI sector contributes to overall economic stability by reducing systemic risk. | en_US |
