Types Non-Bank Financial Institutions
Non-bank Financial Institutions (LKBB) according to Law no. 10 of 1998 is a business entity that carries out an activity in the financial sector, which raises funds by issuing valuable paper and to channel it to pay for corporate investment.
This institution was founded in 1973 based on Minister of Finance Decree No. Kep. 38 / MK / I / 1972 which published that these institutions could carry out the following efforts:
raising funds by issuing temporary letters
provide a medium-term credit
enter into a temporary capital investment
acting as an intermediary between Indonesian companies and government legal entities
acting as an intermediary in getting participants or campaigns
as an intermediary to get an expert and provide advice in accordance with the expertise to do other business in the financial sector.
Types of Non-Bank Financial Institutions
Capital market
In a narrow sense, market is a place where sellers and buyers meet to make transactions. This means that buyers and sellers meet immediately to make transactions in a certain location. The location or meeting place is the market. but in a broad sense the meaning of the market is a place to make transactions between buyers and sellers, where buyers and sellers do not have to meet in a place or meet directly, but can be done through existing information sources such as electronic means.
Understanding the capital market in general is a meeting place for sellers and buyers to conduct transactions in order to obtain capital. Sellers in the capital market are companies that need capital (issuers), so they try to sell securities in the capital market. While the buyer (investor) is the party who wants to buy capital in a company that they think is profitable. The capital market is known as the stock exchange.
Money Market and Foreign Exchange Market
The money market in Indonesia is still relatively new when compared to developed countries. But in today's world development, the financial market in Indonesia is also developing, although not as vibrant as the development of the capital market.
As explained earlier that between the money market and the capital market there are quite clear differences such as the period of time for instruments traded, the place of sale and the purpose of the sellers and buyers of the two markets.
Pawnshop
In general, the understanding of pawning business activities is to guarantee valuable items to certain parties, in order to obtain a certain amount of money and guaranteed items will be redeemed in accordance with the agreement between the customer and the pawning institution.
From the above understanding it can be concluded that the pawn business has the following characteristics:
There are valuables that were pawned
The value of the number of loans depends on the value of the mortgaged item
Mortgaged goods can be redeemed
Leasing
Leasing companies in Indonesia are better known as laesing. The main activity of a leasing company is engaged in financing for the purposes of capital goods desired by customers. Funding here means that if a customer needs capital goods, the leassing party can finance the desires of the nation according to the agreement agreed by both parties. The limitation of leasing is that it is not allowed to carry out activities carried out by banks such as providing deposits and credit in the form of money.
Understanding leasing in general is an agreement between the lessor (leasing company) and the lessee (customer) where the lessor provides goods with usage rights by the lessee in exchange for lease payments for a certain period of time.