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  Abstract  This paper examines the role of Non-Bank Financial Institutions on the growth of capital market in Sub-Saharan Africa and its concomitant effect on economic growth, the main factor in poverty reduction. The study uses the theory of causality as a conceptual framework in understanding the relationship of the dependent and independent variable. The methodology used is a triangulation of the Ordinary Least Square and qualitative method of approach. The study finds that institutional investors are key drivers of capital market development, which in turn drives economic growth. Policy implication is that policy makers should carry out reforms geared towards improving the macroeconomic as well as financial regulatory environment. Key words:  Non-Bank Financial Institutions, Capital Market, Economic growth  Introduction Non-bank financial services include, among others, unit trusts/mutual funds, stockbroking, insurance, pension fund or asset management, and real estate services (Heffernan,2005).  Strong financial systems provide reliable and accessible information that lowers transaction costs, which in turn bolsters resource allocation and economic growth. There has been much discussion on the threat posed to traditional banks by the growth of non-banks. Non-banks , 55 by definition, are firms which do not offer a complete core banking service but are very similar to banks. For example, personal loan or mortgage corporations specialise in loans or mortgages that are funded through bond issues and/or by turning a bundle of assets into asset backed or mortgage backed securities and selling them to raise liquidity. Though they offer a ‘‘banking’’ product, loans/mortgages, they are not  banks because they are not funded by deposits. General Electric Capital (GE Capital) is the financial services subsidiary of General Electric. It issues the largest amount of commercial paper in the USA, supplies credit card facilities to department stores, is the largest insurer of private homes and, for nine years, owned a securities firm, Kidder Peabody. In the UK, Marks & Spencer, well known for its retail clothes, food and home furnishings, began to offer a selection of financial services in the 1980s, starting with an in-house credit card business and expanding into personal loans, unit trusts, personal equity plans and, from 1995, insurance and pensions. Marks & Spencer is able to fund its asset requirements because it is top-rated by key rating agencies. It has since been followed by some well-known shop/brand names such as Virgin, Direct Line Insurance, Tesco and Sainsbury. However, virtually all of these non-bank firms have chosen to enter niche markets  –  they do not offer the core activities that define a bank, intermediation and the provision of liquidity. Usually, if one or more of their products includes part of the core functions (e.g. personal loans and/or deposits), these services are supplied to them by existing banks. For example, Tesco, Sainsbury and Virgin have their banking products supplied to them by either the Royal Bank of Scotland or the Halifax Bank of Scotland (HBOS). First Direct, the highly successful telephone bank (now offering on-line services) is a wholly owned subsidiary of HSBC. Also, there are notable examples of failed entry into these markets. In 1999, Marks & Spencer allowed the use of rival credit cards in its shops for the first time, part of an overall strategy to revive profits. In 2003, it abandoned its in-house card for a Mastercard issue which rewards loyalty. Sears Roebuck was one of the first large retail firms to offer financial services, but it has recently scaled back its activities. Westinghouse wound up its credit arm after it lost nearly $1 billion in property loans. GE Capital purchased Kidder Peabody for $600 million in 1986 but, in 1994, after losses on the mortgage backed securities portfolio and dubious trading activities in government bonds, sold it to Paine Webber (an investment bank) for $90 million plus a 25% stake in Paine Webber. In the UK, the poor performance, to date, of the telephone/on-line bank Egg illustrates the difficulties of setting up a whole new bank, even if the bank offers customers attractive deposit rates.  
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