A non-bank financial intermediary is a financial services firm that does not accept deposits from the general public. It may offer a variety of financial services including leasing, factoring, pension funds, mutual funds and insurance plans. Some non-bank financial intermediaries are also venture capitalists.
Many non-bank financial intermediaries participate in securities exchanges and employ a long-term strategy to grow the funds that they manage. The activity of financial intermediaries is a good indicator of the overall health of the economy and the growth of the financial services sector.
Non-bank financial intermediaries complement banks in that they help invest savings. They also provide a wider variety of services in comparison to banks.