These are financial institutions that receive deposits from the public, give out medium and long term loans at low interest rates but do not create credit.
Examples of non-banking financial intermediaries in Uganda include;
- Microfinance Institutions: These are institutions that provide financial services, such as small loans, savings accounts, and insurance, to individuals and small businesses that may not have access to traditional banking services.
- Pension Funds: These are funds set up to provide retirement benefits to employees. In Uganda, the National Social Security Fund (NSSF) is a prominent pension fund that collects contributions from employers and employees and invests the funds to provide retirement benefits.
- Leasing Companies: Leasing companies offer leasing services for various assets, such as vehicles, machinery, and equipment. They allow businesses and individuals to access assets without the need for large upfront payments.
- Venture Capital Funds: These funds provide capital and expertise to startup and early-stage companies with high growth potential. They typically take equity stakes in the companies they invest in and provide support to help them grow.
- Credit Unions: Credit unions are member-owned financial cooperatives that provide savings and loan services to their members. They are typically formed around a common bond, such as employees of a particular organization or residents of a specific community.
- Investment Companies: These companies pool funds from investors and invest in a diversified portfolio of securities, such as stocks, bonds, and mutual funds. They offer individuals the opportunity to invest in a professionally managed portfolio without directly buying and selling individual securities.
These are just a few examples of non-banking financial intermediaries in Uganda. Each plays a unique role in providing financial services, promoting economic growth, and facilitating access to finance for individuals and businesses in the country.