A commercial bank is usually the financial institution we deal with most often. People deposit and withdraw money everyday from the banks. However, they are not the only financial institutions that exist in our country. There are others, which are called Non-Bank Financial Institutions (NBFIs). When purchasing insurance from an insurance company, taking out an installment loan on your new car from a finance company, buying a share of common stock with the help of a broker, or contributing to the pension fund with FNPF, you are dealing with NBFIs.
In our economy, NBFIs also play an important role in mobilizing financial savings. However, such institutions differ from commercial banks in that they are not authorized to accept demand deposits from the public that can be withdrawn by cheques. Overtime, this sector has grown tremendously, reflecting developments in the financial system and the process of financial innovation witnessed in the late 1980s and early 1990s.
In Fiji, NBFIs include credit institutions, insurance companies as well as the Fiji National Provident Fund. Collectively, NBFIs account for 63 percent of the total financial systems assets.