A good number of candidates attempted this question and scored average marks. Candidates were required to define Central Bank, distinguish between bank and non-bank financial institution and to outline any four contributions of financial institutions to the economic development of their country. Majority of the candidates who attempted this question were unable to clearly distinguish between bank and non-bank financial in the (b) part and few of them could really expatiate their points in the (c) part of the question.
These candidates were expected to state thus to score maximum marks in this question.
- A central bank is government - owned bank which is responsible for formulating monetary policies of the country. It is the head of all the banking institutions in the country.
(b) Bank financial institutions are those financial institutions which receive deposits from
the public and government. The deposits are repayable on demand e.g.
commercial banks , while non- bank financial institutions also accept deposits
from the public in one form or the other but these deposits are not repayable on
demand e.g. insurance companies.
(c) (i) They invest directly in the productive sectors of the economy.
(ii) They facilitate international trade.
(iii) They provide loans .
(iv) They give financial, technical and management advice to their customers.
(v) They help to maintain monetary stability by executing policies of the central
bank.
(vi) They help to mobilize savings for investment.
(vii) They promote the operations of the money and capital markets.
(viii) They help in creating employment.
(ix) They provide infrastructure as part of their corporate social responsibility
