Indirect finance
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. Common methods for direct financing include a financial auction or an initial public offering.Indirect financing (government)
This is where the government gives privilege, in the form of reduced tax burdens, as a means of supporting a particular interest rather than collecting and redistributing tax revenue. For example, a reduced tax burden on financiers provides focused monetary benefits and helps to effectively lower bond prices. This could be applied in a number of applications from infrastructural investment to education or military spending.
