Financial Intermediaries
These are institutions that link or mediate between the investors and savers:
Some examples of financial intermediaries are as follow:
1. Commercial Banks
They act like intermediary between users that may be in investment or savers of funds.
2. Savings and Credit Associations
These are firms which receive the funds of much type of savers and then provide the money like a loan in form of mortgage and to another type of borrowers. They give credit analysis services.
3. Credit Unions
These are cooperative links whose members have common bond as like staff of the similar company. The savings of the member are loaned just to the members at an extremely low interest rate as like SACCOS charge pm interest on outstanding stability of loan.
4. Pension Funds
These are retirement plans or schemes funded through firms or government agencies for their workers' staff. They are administered mostly with the trust department of life insurance or commercial banks companies. As here examples of pension funds are NHIF, NSSF and other registered pension funds of individual firms.
5. Life Insurance Companies
These are firms which receive savings in form of annually premium from individuals and they invest these funds in securities as like shares or in real assets or bonds. Savers will obtain annuities in future.
6. Brokers
These are people who such facilitate the exchange of securities through linking the seller and the buyer. On behalf of public of members they act that that are selling and buying shares of quoted companies.
7. Investment Bankers
These are institutions such buy new matter of securities for resale to another investor.
They perform the following functions as given:
- Providing advice to the investors
- Providing advice to firms that wants to
- Valuation of firms that require merging
- Providing defensive tactics in case of forced takeover