How is the finance company play a vital role in investment intermediaries?
Finance companies:
Finance companies make loans to corporations and individuals by giving consumer lending, mortgage financing and business lending. Some of their loans are same to those given by commercial banks.
Nonetheless, finance companies are different from commercial banks since they do not accept deposits. They increase funds by selling commercial paper (i.e., a short-term debt instrument) and by giving stocks and bonds. Furthermore, finance companies frequently lend to customers perceived as more risky by commercial banks.