Capital Markets vs. Money Markets
| Feature | Capital Market | Money Market |
|---|---|---|
| Term | Long-term (over 1 year) | Short-term (less than 1 year) |
| Instruments | Shares, bonds, debentures | Treasury bills, commercial paper, call deposits |
| Participants | Investors, companies, governments | Banks, central banks, corporations |
| Returns | Generally higher but riskier | Lower returns, more secure |
| Example (Kenya) | Nairobi Securities Exchange (NSE) | Central Bank of Kenya’s Treasury bill auctions |
In short:
- Money markets focus on liquidity and short-term borrowing.
- Capital markets build wealth over time and support long-term projects.