Securities lending is a financial practice where an investor temporarily loans their securities, such as stocks or bonds, to another party, typically a brokerage or institutional investor. In return, the borrower provides collateral, often in the form of cash or other securities, to protect the lender against potential losses. The borrower uses the lent securities for various purposes, such as short selling or fulfilling delivery obligations. The lender earns a fee for the loan, while the borrower can benefit from the use of the securities without having to purchase them outright.