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Money is channeled through financial institutions such as banks. A saver saving with a bank account seeks to keep the money in the bank as it earns him interest. A borrower in need of a loan applies for a loan at the bank and if he is eligible, gets the loan at an interest rate. The borrower may chose to use the funds to invest in a business venture and thus be becomes an investor.

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Q: How money is channeled from savers to borrowers to investors?
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Which explains a way banks channel money from savers to borrowers?

Banks lend the money from savings accounts to people who need loans. (Go do your study island instead of looking them up) I'm just kidding. 😂


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