How would an indirect transfer through a financial intermediary benefit a borrower and a saver? Solution A financial intermediary is an institution that facilitates the channeling of funds between lenders and borrowers indirectly. That is, savers (lenders) give funds to an intermediary institution (such as a bank, insurance company,etc.), and these institutions gives those funds to spenders (borrowers). This may be in the form of loans or mortgages. This will benefits both the spender/borrower and the saver/lender using financial intermediaries in following ways:.