What is financial intermediary and what are the advantages enjoyed by market participants from this

 The most important contribution of financial intermediaries is a steady and relatively inexpensive flow of funds from saver to  final  users or  investors.

Financial  intermediaries include  depository institutions, such  as,  commercial

banks, savings and loan associations, savings banks and credit unions, which acquire the bulk of their funds by offering their liabilities to the public mostly in

the form of deposit. Beside this insurance companies and pension funds are also

act as financial intermediaries.

 

 Advantages enjoyed by market participants:

1. Investors can get more choices concerning maturity for their investments

& borrowers can get more choices for the length of their debt obligations

2. Borrowers can get longer term loan at a lower cost

3. Attaining cost-effective diversification

4. Lower cost accrue to the benefit of the investor

5. Markets participants get the benefit of using cheques, credit cards, debit cards & electronic transfer of funds through financial intermediaries