Abstract
The 2030 agenda for sustainable development pushes countries to reach the objectives set by the UN SDGs, but some countries, especially those in emerging markets, face difficulties in financing this due to a decline in banks’ lending money. These economies thus look to alternative means to raise resources. NBFIs – non-banking financial institutions – may be the solution. Research into South Africa, Nigeria, and Egypt explores the potential of NBFIs to do this, because the link between NBFIs and economic growth is not systematically established. The development of NBFIs can follow demand – economic growth leading to financial development; or supply-lead, acting as a locomotive for economic growth; or follow demand and lead supply simultaneously, creating virtuous or vicious cycles. Findings point to the effect of NBFIs on economic growth in Egypt to be positive and significant. In Nigeria, there is a weak relationship between NBFI development and economic growth, due to external factors influencing the system, loose regulation, and legal frameworks. And in South Africa, NBFIs stimulate economic growth over the long term, and their development is essentially being supply-leading.
Published Version
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