Functions/Roles of Insurance Companies

271 b) Insurance companies facilitate risk transfer c) They accumulate substantial funds which are used for long-term investment d) Through their life and pension businesses they help to develop the financial market e) They help to mobilise national resource by encouraging individuals to save f) They operate pension schemes on behalf of companies g) They grant loans on mortgages h) They act as underwriters in the capital market i) Insurance policies are used as collateral securities for bank loans.
Finance Companies Finance Companies mobilize deposits from people and give them to their customers to improve their business. They use money market instruments like Commercial Paper (CP) and certificate of deposit and other short time instruments. They make the funds mobilized available to their customers fora short and medium term by making finance available for such businesses like Local Purchase Orders (LPO), Debt factoring and securities trading.
Mortgage Institution Every other institution involved in mortgage finance apart from Federal Mortgage Bank is all referred to as primary mortgage institutions. The reason for the name is that they deal directly with individuals and estate firms while the Federal Mortgage Bank remained the supervisory body. They are also involved in the intermediation process as they accept deposits from small savers and borrowing from other institutions W finance the development of housing sector. They offer long term credit facilities to encourage people to build or buy their own houses.

Functions of Mortgage Banks a) They accept deposits from members of public. b) They encourage members- of public to cultivate saving habits. c) They build and provide houses for low income earners. d) They finance estate developers. e) They give loans to individuals and thereby encourage them to have their own houses.

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