Abstract
The challenges of financial systems have immediate or medium-term social effects. The financial industry is constantly searching for measures to reduce these challenges, especially for those with little or no access to financial services. While current communication technologies make services more accessible through digital mobile platforms, there are still difficulties in establishing viable customer arrangements. In addition to the increased investment in financial technologies, nonbanking financial institutions have now expanded to offer more flexible services tailored to individual circumstances, especially those in isolated rural areas. This research outlines the network model of nonbanking financial institutions in Romania, as well as a microfinance model, based on the financial analysis of four national indicators of nonbanking financial institutions. Data used are presented in absolute values, from the annual numerical series for the reference period 2007–2017. The new initiatives and features incorporated in this Romanian model should be applicable elsewhere and will actively contribute to the expansion and sustainability of financial services, with a positive inclusive impact on society.
Highlights
In a global context where large populations have inadequate access to financial services and slow local and regional development, this study assesses the expansion of the nonbanking financial institution (NFI) sector in recent years; it briefly reviews innovative financial models designed to improve access to and the relevance of financial services for people previously not participating in regulated financial systems
We present the situation of the main indicators of the NFIs, as well as a microfinance model developed from a conceptual and testable point of view in the rural area for the Romanian market
An enormous expansion of NFIs has occurred to meet the demand for financial services from huge populations currently inadequately serviced
Summary
In a global context where large populations have inadequate access to financial services and slow local and regional development, this study assesses the expansion of the nonbanking financial institution (NFI) sector in recent years; it briefly reviews innovative financial models designed to improve access to and the relevance of financial services for people previously not participating in regulated financial systems. These investigations give indications of successful ways to promote social inclusion and its benefits. Financial regulators are tightening measures against money laundering and terrorism financing
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