Question

What do you mean by direct and indirect business in the capital market?

Answer 1

If you're in business, you might have heard about direct and indirect finance. Unlike indirect finance, direct finance involves getting funds directly from investors. This may involve an initial public offering, where shares in the company are offered for sale.

Answer 2

Indirect finance is where borrowers borrow funds from the financial market through indirect means, such as through a financial intermediary. This is different from direct financing where there is a direct connection to the financial markets as indicated by the borrower issuing securities directly on the market.