What type of funding occurs when foreign entities provide capital to domestic borrowers?

The scenario described relates to a situation where foreign entities provide capital to domestic borrowers, which is best classified under international funding. This term encompasses various forms of financial assistance where capital flows across borders, typically involving investments made by individuals, governments, or corporations from one country to another.

International funding can take many forms, including foreign loans, investments in local businesses, and even donations. The critical aspect here is the cross-border investment or lending nature, aligning with the scenario provided.

In contrast, foreign direct investment specifically refers to a situation where a foreign entity not only invests capital but also gains a significant degree of control over the business operations in the domestic market, which is not necessarily the case in general borrowing situations. Other terms, like global capital and overseas borrowing, may refer to different facets of finance but do not encapsulate the broad category of funding that includes various forms of international financial flows as effectively as the label of international funding does.