Functions of Development Banks

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Functions of Development Banks The functions of development banks areas follows a) To promote and develop small-scale industries (SSI); b) To finance the development of the housing sector c) To facilitate the development of large-scale industries (LSI); d) To help the development of agricultural sector and rural town e) To help to review (cure) sick industrial units f) To encourage the development of entrepreneurs g) To promote economic activities in backward regions of the country and h) To contribute in the growth of capital markets
Microfinance Banks
Microfinance involves the provision of financial services to the poor and the low income segment of society. Worldwide, microfinance has been identified as a potent instrument for promoting financial inclusion and consequently, poverty alleviation.
Impact of the Microfinance Subsector in Promoting Financial Inclusion Targets set for the subsector at inception in 2005 included the following a) To cover the majority of the poor but economically active population by 2020 thereby creating millions of jobs and reducing poverty. b) To increase the share of micro credit as a percentage of total credit to the economy from
0.9 percent into at least 20 percent in 2020 and the share of micro credit as a percentage of GDP from 0.2 percent into at least 5 percent inc) To promote the participation of at least two thirds of the states and local governments in micro credit financing by 2015 d) To eliminate gender disparity by improving women’s access to financial services by 5% annually e) To increase the number of linkages among universal banks, developmental banks specialised finance institutions and microfinance banks by 10% annually.
Insurance Companies Insurance is a pool of risk or means of spreading risks or losses of few people over a large number of people or companies. It is the conversion of indeterminate risks into fixed costs byway of consolidating or an economic device whereby risks of living and of economic enterprises are spread over a reasonable number of insured. In performing these functions, the insurance Companies collect premium from several insured. The role they perform is similar to that of banks because the premium they collect is inform of deposit mobilization by banks.

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