Question

distinguish between financial and non financial institutions

Answer 1

Differences between financial & non financial institutions:

Financial institutions are called as deposit institutions would include commercial banks, savings & loan associations, mutual savings bank & credit unions. Whereas non financial institutions would include insurance companies, investment companies, brokerage firms, credit card companies, finance companies & alternative financial services such as payday lenders, pawnshops etc.

• Financial institutions accept deposits from the public while non financial institutions don’t.
• Financial institutions have direct dealings with their customers while non financial institutions deal with banks & government.
• Financial institutions take part in all activities that concern finance while non financial institution is concerned with loan needs of large enterprises.
• Financial institutions deal with both national & international customers while non financial institutions are concerned with finance of foreign companies.