Unregulated Financial Institutions and Their Impact on the Jamaican Economy.
TITLE OF RESEARCH Unregulated Financial Institutions and their impact on the Jamaican Economy. PROBLEM STATEMENT The Jamaican Society has been overrun by an unprecedented proliferation of unregulated financial institutions; what are the effects of these institutions on the Jamaican economy? PURPOSE OF STUDY The purpose of the study is to determine the effects of these institutions on the Jamaican economy/society (individuals, regulated banking institutions, government). The objective is to obtain this information through the use of questionnaires and interviews.
The targeted population sample used will be investors within the age group of 18-50 yrs from a wide cross-section of differing social classes. SIGNIFICANCE OF THE STUDY The impact of these schemes on the economy to unsuspecting investors has been both positive and negative. The encouraging factor for the vulnerable investors was the eagerness for high returns on their investment. This research will focus on these schemes, their effects on the economy, and to a lesser extent the role they play in the lives of investors. It is intended that the findings will assist: 1.
To improve policy – by proving guidance to the Financial Services Commission (FSC) in establishing or re-enforcing the requisite regulations. 2. To add to existing research 3. To build public awareness of the risks involved in investing CENTRAL RESEARCH QUESTION Unregulated Financial Institutions and their impact on the Jamaican Economy. SUB-RESEARCH QUESTIONS 1. How did investing in Ponzi/Pyramid schemes affect individuals’ income or lifestyle? 2. What were the effects of these schemes on family lives? 3. How did this impact the regulated financial institutions? 4.
Was the Financial Services Commission proactive in enforcing policies to deal with these schemes? 5. What was the main motivating factor for investing in these schemes? 6. What impact did the returns/gains had on the Jamaican economy? DEFINITION OF KEY TERMS KEY TERMSDEFINITION Unregulated Financial Institutions unofficial/unregistered financial entities Financial Services Commission (FSC) Non-bank local regulatory authority mandated to oversee and monitor the actions of all local financial entities Ponzi Scheme Term given to investment schemes in the 19th century named after Charles Ponzi who created the largest related scandal then.
