[Economic Term] Indirect Financing /Direct Financing

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Today's economic terms are indirect finance and direct finance.

Indirect financing occurs when someone intervenes between those who have sufficient funds and those who lack funds, and direct financing occurs when there is a direct transaction.

In indirect finance, financial institutions such as banks play a central role, and in direct finance, capital markets such as stocks and bonds play a central role.

In general, as the financial market develops, the proportion of direct financing increases compared to indirect financing.

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