The Role of Financial Intermediaries in Economic
Development Dr. (Smt.) Anita Modi, Department of Economics, Government College Khetri, Dist.- Jhunjhunu, Rajasthan Dr. Chandra Prakash Kulshreshtha, Department of Business Administration, Government College Khetri, Dist.- Jhunjhunu, Rajasthan
Abstract
Financial intermediaries play a crucial role in economic development by channelling funds from savers to borrowers and providing various financial services. This paper explores the multifaceted role of financial intermediaries in fostering economic growth, stability, and inclusion. It begins with an introduction to the concept of financial intermediation and its significance in allocating resources efficiently. Theoretical
frameworks, historical perspectives, and empirical evidence are presented to elucidate the functions and impacts of financial intermediaries. Challenges such as access to finance, technological disruptions, and systemic risks are discussed, along with policy recommendations to address them. The paper concludes with future research directions and policy opportunities to enhance the effectiveness and resilience of financial intermediation in driving inclusive and sustainable economic growth.