The allocation of financial resources to deficit sectors is one of the main functions of the financial system. Through the components of the financial system, the financial markets and institutions, through the process of asset transformation accumulates the surplus financial resources (savings) of the surplus sector, which are then allocated to the deficit sector. Financial intermediaries play a key role in the transfer of financial resources. In bank-centric financial systems, commercial banks, i.e., bank loans, are the most common source of external financing for deficit units, especially the corporate and household sectors. In contrast to bank-centred financial systems, in market-centred financial systems, financial markets and nonbank financial intermediaries such as institutional investors (investment and pension funds, insurance companies, etc.) are also important sources of external financing for the deficit sector. The efficient allocation of financial resources is considered to be the allocation of financial resources to the units of the deficit sector with the most productive investments. Business sector investment is generally more productive than investment by the government sector and other deficit sectors, and contribute more to the growth and development of the economy. Secondary data, selected statistical data from the Croatian National Bank, the Croatian Financial Services Supervisory Agency and the Zagreb Stock Exchange were used for the study. The aim of this work is to investigate to which entities of the deficit sector the Croatian financial system allocates more and to which it allocates less financial resources, and how this affects the efficiency of the Croatian financial system in the allocation of financial resources. The results of the study show that the Croatian banking sector allocates more credit to the household sector with a negative structure by purpose and less to the corporate sector, while financial resources flow through non-bank financial intermediaries and the capital market mostly to the government sector and only to a small extent to the corporate sector. This indicates the inefficiency of the Croatian financial system in allocating financial resources to the deficit sector.