These are deposits and loans made through their branch network at published rates of
interest. The branches are like retail outlets for banking services. Like Commercial
Banks in Sierra Leone
Wholesale banks (Secondary)- These are known as investment banks, merchant banks
they often act as ‘brokers’, arranging loans for companies from a number of different
sources. They also offer financial advice to industry and assist firms in raising new
capital through the issue of new shares.
Includes finance houses- that specialize in lending to business and in providing hire
purchase finance for the purchase of consumer durables, such as cars, furniture and
electrical goods. Building societies specialize in granting loan (mortgages) for house
purchase. Like Home Finance Company in Sierra Leone.
They compete for savings of the public through a network of high street branches. They
are not PLC, their shares being the deposits made by their investors. To date, the
development of non-bank financial markets has been limited. Insurance and capital
Markets remain underdeveloped in most countries.
As in Sierra Leone the Insurance Market is relatively small and for the capital market is
just in the making. Capital market activity remains concentrated in a small number of
firms in a limited number of countries. There is a relation between country size and
capital market development; it is harder for a small country to support a well-diversified
capital market.
Similarly, there is also a strong relationship between the development of capital markets
and the timing and consistency of its economic reforms. Those countries that started the
reform process earlier and those that have been following consistent policies in support
of financial market development have grown more rapidly.
The developments of privately managed pension funds have acted as a catalyst of
capital market development in some countries. The Conventional insurance companies
in Sierra Leone used to trade in privately managed pension funds, but with the inception
of a publicly regulated body, National Social Security Insurance Trust (NASSIT) the