Non-depository institutions are nonbank financial institutions
that do not have a banking license and cannot accept deposits from
the public. Examples of non-depository financial institutions that
play an essential role in modern finance are insurance companies,
mutual fund companies, security brokers, pawn shops, finance
companies, and pension funds. Non-depository financial institutions
provide a wide variety of financial services to both individuals
and businesses and provide an alternative route for funneling
savings into capital investment. Non-depository financial
institutions compete with banks (depository institutions) in
offering financial services.