What is Financial Intermediaries ? Its Role, Function ? and Types?

Basically, there are surplus and as well as deficit entities in a given economy in terms of their resources. Though there are few different types of resources (Factors of production), here we are talking about capital/funds/money.

Financial intermediaries are the middlemen who will understand the needs and wants of both of these surplus (investors) and deficit (borrowers). FI's will earn the trust of both parties while providing them a solution for their problem.

So Financial Intermediaries such as Banks, Finance Companies, Leasing Companies will accept surplus funds (deposits) and provide lend these funds for those who need (loans). While doing this, FI's also provide a stability to the flow of the economy and money supply of the country.

Since there are problems to worry about such as timing of the maturities, liquidity while maintaining the required return and minimizing the losses with regard to bad debt and inefficiencies, these Financial Intermediaries are governed by strict rules and regulations.