The money market provides an outlet for the lenders fund that would otherwise remain idle.

The money market provides assets whose maturity is days, weeks or months away and if the lender needs cash before the maturity date he can sell the paper to someone else through the market with little risk of loss,

For the banks day-to-day loans provide them with a highly liquid form of secondary reserves. Without these very liquid assets, the banks would find it necessary to keep higher cash reserves which Of course pay no interest.

Borrowers are able to tap sources of funds that otherwise would not be available and they obtain the money at lower rates of interest than through other channels.

Lenders or dealers earn income from the money market operations in the form of commission and profit.

The money market smoothens the flow of funds from one part of the county to another, minimize the disturbances in the financial markets that might result from such flows.

The Capital Market

 Capital market is a group of firms which borrow and lend money on a long-term basis. That is for a period of three years and above. The members of the capital market include among others, Investment Trustee, Banks, Insurance Companies, Building Societies and the Stock Exchange.