Financial intermediaries are third parties that assist with moving excess funds from one party to another. Financial intermediation is how financial institutions take funds from a depositor and lend it to a borrower. The banking business is one of the institutions that thrive at this.
Financial intermediaries are an essential component of financial markets; they are vital in them working well and sustaining the economy. For an economy to function effectively, there must be a steady flow of money. Intermediaries play a massive role in this by assisting with giving credit to those who are in need.
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Financial intermediaries are vital in the growth of self-employment opportunities. Employment is a good sign of economic development. So many individuals have bright and innovative ideas but lack the capital to begin. These intermediaries assist in providing finance for self-employment programs.
A lot of economies have certain regions that are behind in development. Sadly, these are regions that show a lot of promise in growing the economy. Financial intermediaries help by providing affordable loans to develop industries in these regions. Industry growth is a good indicator of economic growth.
There are always people that socially and economically depressed in a country. Financial intermediaries can give these people loans, which are often partly subsidized by the governments. Such actions will help them develop various economic activities. Once these people are empowered, the economy is sure to grow, and their lives will improve.
Housing finance is something that has been made easy for people these days.
Financial intermediation has a lot of sections, some of which are in line with housing finance. Some areas assist in creating flexible and various payment options to purchase a house. This means more people can buy property, and it vastly improves the standard of living of many people and develops the economy.
