A COMPARATIVE ANALYSIS OF FINANCIAL PERFORMANCE OF NON-BANK FINANCIAL INSTITUTIONS IN BANGLADESH

doi:10.46281/amfbr.v6i1.1455

Abstract

NBFIs play an important role in economic development through ensuring proper mobilization of funds in Bangladesh. This study represents a comparison of nine NBFIs operating their business in Bangladesh within the period from 2016 to 2019 through using financial ratios and other measures. To analyze the financial performance this study has used ratio analysis, such as ROA, ROE, ROCE, Institutional size/ Total assets and total equity etc. The outcome of this study says that for generating return the NBFIs performance based on efficiency ratio is different from the performance based on liquidity ratio, capital ratio and other financial measures. This study suggests to NBFIs to be more conscious about loan selection and establish a brand image through providing more efficient services. It also suggests the NBFIs to finds more income generating areas to be more competitive. In the coming years NBFIs will have more prospects that will ensure the economic development of our country.

Highlights

An efficient financial system is essential to ensure economic development for any nation because it ensures a smooth transfer of fund from the surplus to deficit unit
This study suggests to Non-bank financial institutions (NBFI) to be more conscious about loan selection and establish a brand image through providing more efficient services
Sample Size & Sources of Data: The data used in this study consists of nine finance companies (NBFI) that are listed on the Dhaka Stock Exchange

Summary

Introduction

An efficient financial system is essential to ensure economic development for any nation because it ensures a smooth transfer of fund from the surplus to deficit unit. To ensure an interruption free production, keeping the market competitive and assist the economic transaction properly a well-functioning financial system has no substitute. An efficient financial system means allocating the resources efficiently. It is the foundation of enhancing the performance of the organizations. It ensures the economic development of a country. NBFI supports the economy through investment in the capital market, entrepreneurs’ by giving short term or long term loans and through providing many other activities. Asset management (AM), institution size (IS), and operating efficiency three principal factors are important for enhancing the financial performance (Miskhin, 2019)

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