Indirect finance requires that ultimate lenders (surplus-budget units) and ultimate borrowers (deficit-budget units) have a coincidence of wants in terms of the amount, form and terms of loan.

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Indirect finance involves financial intermediaries like banks and financial institutions that pool resources from lenders and provide funds to borrowers, eliminating the need for a direct coincidence of wants between individual lenders and borrowers.

Indirect Finance Requires That Ultimate Lenders (Surplus-Budget Units) and Ultimate