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The purpose of this study is to examine the relationship between regulation of non-bank financial institutions (NBFIs) and their performance in Ghana.

The analysis is performed using data derived from the Bank of Ghana Database during a five-year period, 2006-2010. Correlated panels corrected standard errors model is used to estimate the regression equation. Capital adequacy requirements and the restrictions on the ability of non-bank financial institutions (NBFIs) to take deposits are used as proxies for regulatory pressure. The study also used the return on assets (ROA) and return on equity (ROE) as measures of NBFI performance.

Results of the study emerged with the evidence that there exists a positive relationship between minimum capital adequacy requirement of 10 per cent and profitability. This indicates that asking NBFIs to keep higher minimum capital adequacy ratio has resulted in improving their profitability. This suggests that capital regulation is an effective tool in enhancing the stability and the profitability of the financial services sector. In addition, the paper finds a positive relationship between regulatory pressure in terms of restrictions on deposits and NBFI profitability. This means that non-deposit-taking NBFIs have improved performance. This indicates that restricting NBFIs in terms of deposit-taking rather goes to increase profitability.

The value of this study is in respect of its contribution to the extant literature on financial regulation and performance of NBFIs.

The purpose of this study is to evaluate the effect of some internal features that influence the efficiency of non-bank financial institutions (NBFIs) in Bangladesh.

The study selected the top 15 Dhaka Stock Exchange (DSE)-listed NBFIs according to purposive sampling. The study period was from 2016 to 2020. Secondary data were collected from annual reports. The cost-to-income ratio was a dependent variable that was used as a proxy of operational efficiency. The ordinary least square regression technique was applied to measure the impact of firm-specific factors on efficiency.

Results showed that number of employees, branch number, firm size and deposit ratio have a significant effect on efficiency at 5% level. The number of branches and employees showed a negative impact, whereas firm size and deposit ratio showed a positive effect on the firms' efficiency. The deposit ratio is negatively related because deposit interest expenses were more than offset by interest income generation through the conversion of deposits into loans.

The study has practical and policy implications on NBFIs' managers, employees, shareholders, depositors, clients, regulatory authorities and government as efficiency enhancement would bring financial soundness.

This study shed light on some firm-specific factors that can be changed to increase operational efficiency or reduce the cost-to-income ratio. The novelty of the study is that it identified some significant associations between firm-specific factors and the operational efficiency of NBFIs.

The purpose of this study is to examine the relationship between regulation of non‐bank financial institutions and their risk‐taking behaviours in Ghana.

The analysis is performed using data derived from the Bank of Ghana Database during a five‐year period, 2006‐2010. Correlated Panels Corrected Standard Errors model is used to estimate the regression equation. Capital adequacy requirements and the restrictions on non‐bank financial institutions' (NBFIs') ability to take deposits are used as proxies for regulatory pressure. The study also used the ratio of risks weighted assets‐to‐total assets, the ratio of non‐performing loans‐to‐net loans and the Z‐scores of NBFIs as measures of risk.

The results of the study show a negative relationship between minimum capital adequacy requirement and the risks weighted assets of NBFIs. This indicates that, asking NBFIs to keep higher minimum capital adequacy ratio results in reducing their risk‐taking. The results also indicate a positive relationship between regulatory pressure and risk weighted assets of NBFIs. The paper however found a negative relationship between restrictions on deposits and the risk of insolvency. The findings suggest that, non‐deposit‐taking NBFIs have higher risk weighted assets and are more prone to the risk of insolvency than deposit‐taking NBFIs.

The value of this study is in respect of its contribution to the extant literature on financial regulation and risk‐taking of NBFIs.

The purpose of the present paper is to examine the impact of off‐balance sheet (OBS) activities on non‐bank financial institutions' (NBFI) productivity.

The paper utilized the Malmquist Productivity Index (MPI) methodology, which allows us to examine five different indices namely, the productivity change (TFPCH), technological change (TECHCH), efficiency change (EFFCH), pure technical efficiency change (PEFFCH), and scale efficiency change (SECH) indices. A series of parametric and non‐parametric tests are performed to examine whether the merchant banks and finance companies were drawn from the same population. Finally, a multivariate analysis based on the GLS fixed and random effects estimators are employed to examine the relationship between the productivity scores derived from the MPI with NBFI specific characteristic variables.

The empirical findings suggest that Malaysian NBFIs have exhibited productivity progress during the study period. The decomposition of the TFPCH index into its EFFCH and TECHCH components indicates that the Malaysian NBFIs productivity progress was mainly attributed to technological progress rather than efficiency increase. We have also examined the productivity progress/regress of different NBFI groups operating in Malaysia. The results suggest that while the merchant banks have exhibited productivity progress attributed to the increase in efficiency, the finance companies on the other hand have exhibited productivity decline due to the decline in efficiency. The inclusion of OBS items has resulted in a lower Malaysian NBFIs productivity growth. However, the findings suggest that while the merchant banks' productivity was enhanced with the inclusion of OBS items, the finance companies' productivity growth seem to have worsened. The results suggest that the omission of OBS items may result in the TECHCH of both the merchant banks and finance companies to be overestimated. Conversely, the inclusion of OBS items has had positive impact on both the merchant banks' and finance companies' efficiency. The empirical findings also suggest that the omission of OBS items resulted in the overestimation of both the merchant banks and finance companies scale inefficiency.

The paper can be extended to consider the production approach along with the intermediation approach, which has been applied in this paper. Investigation of changes in efficiency over time by employing the data envelopment analysis approach could yet be another extension to the paper.

This paper provides new empirical evidence on the productivity of NBFIs, particularly in a developing economy.

This study aims to investigate the influence of corporate governance structures of non-bank financial institutions (NBFI) on their profitability.

The analysis is performed using data derived from the Bank of Ghana database during a nine-year period, 2006-2014. Correlated panels corrected standard errors model is used to estimate the regression equation. The study uses board size, board independence, gender diversity, CEO duality and tenure and board meetings as proxies for corporate governance. Audit committee size, independence and meetings are used as measures of audit committee activity. The study also uses the return on assets as measures of NBFI profitability.

Results of the study show that there exists positive relationship among board size, audit committee size, meetings of the audit committee and profitability. However, board composition, gender diversity, board meetings and audit committee independence show a negative relationship with NBFI performance. From the findings of the study, it is evident that there are mixed results regarding corporate governance mechanisms and profitability of Ghanaian NBFIs. The results imply that the Ghanaian NBFI industry have unique characteristics and may react differently to corporate governance structures.

The value of this study is in its contribution to the extant literature on corporate governance and profitability of NBFIs.

The paper aims to develop a microcredit evaluation model (MEM) which could serve as a useful tool for banks and NBFIs when SMEs’ economic and financial risks are evaluated.

Based on the literature review, a set of 17 qualitative and quantitative prudential indicators is selected. Further, a calculation system is developed which relies on the multiple criteria analysis model elaborated by Altman (1968); starting from this, a matrix is developed and a rating system is built. The model is tested among six NBFIs which operate on the Romanian market; three of them are labeled by the Romanian Central Bank as the worst performers, while the other ones are qualified as the best performers. Data are collected from companies’ annual reports and also from the Ministry of Finance.

It proves that the MEM can serve as a useful tool for the national and international NBFIs’ risk assessment. It can anticipate NBFIs’ success or fall. Furthermore, its results can be guaranteed with a probability of 95 per cent, calculated through the VaR method. Last but not least, it can also be used by the international NBFIs which intend to enter in the Romanian market.

The present paper proposes an original model based on both quantitative and qualitative indicators organized in an integrative equation. The MEM helps both parties involved in the financial grant awarding process – NBFIs are able to better assess requests from SMEs, enabling them to increase the volume of granting, whereas SMEs are able to access money for development projects more easily.

The purpose of this paper is to indicate an innovative solution to address the financing issues faced by “Micro-, Small and Medium Enterprises” (MSME) in emerging economies.

Islamic Financial Institutions (IFIs) especially Islamic banks are competing for high net worth individuals, whereas the MSME sector is largely untapped. A collaborative model for IFIs is suggested, to explore the MSME sector. Islamic Non-Banking Financial Institutions (NBFIs) are operating in these markets through their extensive gross route networks. The multistep collaborative model proposes “Special Purpose Entity (SPE)” partially owned by a single Islamic Bank or consortium and NBFI/s. SPEs can be incorporated with a defined scope, focus areas, risk profile, budget and shareholding patterns.

Risk and profit sharing instruments also known as Musharakah and Mudarabah have less than 6 percent share within total financing offered by Islamic banks globally. Risk sharing products offered by Islamic banks are not targeting this sector due to the underdevelopment of instruments, lack of knowledge and resources. Proposed SPEs can operate regionally with a concentration on specific business sectors.

The SPE model would enable Islamic banks to enter the huge MSME market while mitigating risk. On the contrary, it would enable the large segments of emerging economies (bottom 40 percent population of developing nations) to get involved and actively play their role to attain long-term development goals.

Over the past decade concern has been raised by much of the international community about the integrity and stability of the financial system, given the amount of money being laundered to convert the profits of illegal activities into financial assets which appear to have a legitimate origin. This money includes not only the gains from the sale of illegal drugs but also the profits from organised crime and tax evasion. Annual estimates of laundered funds range from US$300bn to as much as US$1.000bn, which the International Monetary Fund estimates is 2—5 per cent of global gross domestic product. The bulk of these funds are derived from the nearly US$400bn a year generated from the illegal drugs trade. The magnitude and seriousness of money laundering motivated the General Assembly of the United Nations in 1988 to adopt a universal pledge to put a halt to this activity.

The purpose of this paper is to investigate the opportunities and challenging prospects for liberalizing financial services in various ways under the General Agreement on Trade in Services (GATS), in view of Bangladesh's interests and concerns.

Different tabular and graphical approaches and critical investigation are conducted to analyze the impact of financial liberalization to explore challenges and opportunities of liberalizing financial sector under GATS framework.

This paper finds that although Bangladesh does not make any commitment under GATS, the rate of liberalization in the financial sector has been quite rapid. As one of the least developed countries (LDCs), Bangladesh should have the flexibility to make commitments as well. From the present status of financial sector liberalization, this paper recommends that Bangladesh should adopt commitments because any non‐commitment sends the wrong signal to the global market and may reduce foreign direct investment.

The recommendation of this paper is very practical for trade policy for liberalizing financial sector in Bangladesh as well as other developing countries which already made great liberalization of this sector but did not make any commitments under GATS.

This paper is the first attempt to analyze the financial sector liberalization under GATS framework in the LDCs particularly in Bangladesh financial sector.

Microfinance institutions (MFIs) play an important role in economic development, with the dual objectives of social outreach and financial self-sufficiency. The purpose of this study is to examine the influence of organizational structure and variations in legal systems on the MFI dual performance goals.

Using a sample that includes 1,518 MFIs from 105 different countries over a period of 20 years, this study analyzes the data by applying a model that includes six categories of organizational structures and variations of legal systems, including both civil and common law, with accounting performance measures for the dependent variables.

The analyses provide robust results indicating that MFIs structured as non-governmental organizations (NGOs) have better social outreach than all other types of MFIs and exhibit better financial performance than MFIs registered as commercial banks or credit unions. Legal systems also played a role in MFI effectiveness.

Given the increasing importance of MFIs on economic development globally, this study has relevance on how the impact of MFI structural characteristics and macro-level influences on their dual performance criteria can be translated into management approaches and governance policies that can increase the effectiveness of these dual (i.e. social and financial) goals.

This study is more comprehensive than prior research in addressing the influence of organizational structures of MFIs and legal systems on MFI dual mission, namely, its financial performance and social outreach, thereby increasing our understanding of policy implications in sustaining the MFI’s developmental role.