Equity financing decisions and financial sustainability of non-bank financial institutions

Equity financing is a key factor in the operations and long-term stability of Non-Bank Financial Institutions (NBFIs). This study investigates the relationship between equity financing decisions and the financial sustainability of NBFIs in Calapan City, focusing on cash outflows, investments, and shareholding practices in relation to financial performance indicators such as Return on Investment (ROI), Return on Assets (ROA), and Return on Equity (ROE). Using a descriptive-correlational research design, data were collected from NBFI managers and analyzed to determine the strength of these relationships. The study covered 58 NBFIs, allowing for thorough institutional analysis and sufficient statistical basis to generalize the results to the full population. Results indicate that NBFIs actively employ equity financing to manage cash outflows prudently, enhance investment activities, and maintain transparent and well-governed ownership structures. Despite this, the study found a generally low correlation between equity financing decisions and financial sustainability, suggesting that management efficiency, operational strategies, and market conditions play a more significant role in sustaining performance. Based on these findings, a Capital Sustainability & Growth Framework (CSGF) is proposed, highlighting targeted equity allocation, strengthened governance, and performance-focused investment practices to promote accountability, institutional resilience, and long-term financial sustainability.