Question

Understand why financial intermediaries such as banks exist

Short answer

Leasing and factoring services are available through intermediaries, however they do not collect deposits from the general public.

Step-by-step solution

Step:1 Financial intermediaries bank:

Since they sit between savers and borrowers, banks act as financial middlemen. Deposits are made with banks, and interest is paid out and money is withdrawn. Banks provide borrowers loans, which they must repay with interest.

Step: 2 Intermediaries banks exist:

Financial intermediaries function as go-betweens for monetary operations involving banks or funds. These intermediaries aid in the creation of efficient markets and the reduction of transaction costs. Leasing and factoring services are available through intermediaries, however they do not collect deposits from the general public.