What Are Merchant Activities?

Merchant activities are business transactions that result in the sale of goods or services. They are generally undertaken with an orientation towards profit-making. The term ‘merchant’ is derived from the Latin word mercantilism, meaning to trade or traffic in goods. Historically, merchants have operated as long as industry, commerce, and trade have existed.

What Are Merchant Activities?

They have been known in different forms and in many cultures including Babylonia, Assyria, China, Egypt, India, Phoenicia, Greece, Rome, Persia, and Turkey. Merchants in modern times operate on a global scale, enabling them to facilitate the transfer of goods across geographically dispersed markets.

Merchant banks are non-depository financial institutions that offer banking services to large enterprises and high-net-worth individuals payment processing companies. They offer a range of services like stock underwriting, securities issuance, portfolio management, and loan syndication. They also act as financial intermediaries to promote new ventures and assist the capital market in boosting investment.

In addition to providing the above services, merchant bankers help their clients in arranging finance for overseas projects through their network of foreign correspondents. They also offer consultancy on a wide range of matters pertaining to the finances, marketing, and management of a business.

They help their clients in starting a new businesses, raise its finance, modernize or expand it, revive sick units, etc. They can provide financial assistance to the companies by way of equity or debt share issuance or by forming joint ventures with them. They can also invest their own assets in the financial markets to earn the fee for advisory services.

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