Performance Measurement of Non-Banking Financial Institutions in Bangladesh

Abstract

The objective of the study is to evaluate the Non-Banking Financial Institution (NBFI) sector in Bangladesh. This study represents the overall sector and specifically 10 non-banking financial institutions operational activities in Bangladesh from 2018 to 2022. To analyze the sector this study has focused on strategic evaluation, evaluation of the current state of the market, financial performance evaluation of non-banking financial institution sector. In strategic evaluation of the NBFI sector the Porters Five Forces Model was discussed to assess the sector. In the current state of the market total loans and deposits was reported 1st quarter of the 2023. Lastly, in the financial performance evaluation of non-banking financial institution sector the ratios like, ROA, ROE, ROC, EPS, current ratio, leverage ratio, capital adequacy ratio, debt equity ratio, cost to income ratio, non-performing loans, trends in assets, liabilities and deposits, trends in total loan/lease and classified loan/lease, and trends in profitability of non-banking financial institutions. The outcomes of this study tell us that the non-banking should be more concern about collecting their classified loans to keep the non-performing loans ratio low of this sector. Then to generate more income they should give focus on their operational expenses and rather than depending only on deposits they should invest more in the innovations like other sectors of this country which will later help them to generate more income. The non-banking financial institutions has to play a vital role for Bangladesh economic growth to become a developed country in the world.