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Measurement of Non-bank Financial Intermediation

In: Shadow Banking and Financial Risk in Emerging and Developing Markets

Author

Listed:
  • Damilola Tope Oyetade

    (University of KwaZulu-Natal)

  • Khadijah Jumanne Kishimba

    (University of KwaZulu-Natal)

  • Joseph Olorunfemi Akande

    (Walter Sisulu University)

  • Paul-Francois Muzindutsi

    (University of KwaZulu-Natal)

Abstract

Non-Bank Financial Intermediaries (NBFI) occasionally compete with commercial banks but offer services that are not always fit for banks. This study aims to evaluate NBFI measurement to ascertain their relevance in the African financial system. To achieve this objective, the study compares different methods and classifications employed to measure NBFI, to identify the role of NBFI, their interconnectedness with the financial sector, and their overall systemic importance in developing and emerging economies, specifically focusing on the African continent. Annual data on NBFI from 30 African countries during the period 2000 to 2022 was obtained to measure NBFI. Descriptive statistics and fixed effect model with corrected standard errors were employed to analyse annual data on NBFI from 30 African countries during the period 2000 to 2022. Our findings showed that although NBFIs support credit intermediation, the challenge of having proper statistics to critically identify the NBFI’s contribution to a country’s economy still holds. The implication is that NBFI operating credit intermediation in shadow poses a great risk to Africa’s fragile financial sector and economic performance. Finally, our results showed that a country’s financial development level eliminates activities of NBFI being unaccounted for.

Suggested Citation

  • Damilola Tope Oyetade & Khadijah Jumanne Kishimba & Joseph Olorunfemi Akande & Paul-Francois Muzindutsi, 2025. "Measurement of Non-bank Financial Intermediation," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Sheunesu Zhou (ed.), Shadow Banking and Financial Risk in Emerging and Developing Markets, chapter 0, pages 51-72, Palgrave Macmillan.
    • Handle: RePEc:pal:pmschp:978-3-031-86224-3_3
    DOI: 10.1007/978-3-031-86224-3_3
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