The informal financial sector and markets in Africa: an empirical study

Abstract

It is argued in this paper that the informal financial sector in Africa is relatively large and plays a crucial role in savings and investment. Thus, for optimal financial resource allocation, informal financial institutions and markets need to be given due consideration in policy design. The paper presents the characteristics of the informal financial sector in five African countries. It then looks at some of the ideas expressed about the nature and workings of the informal system. An attempt is made to hypothesize (wihtin a very static framework) the relationship between the formal and informal segments of the financial market. -from Authors � 2017 Elsevier B.V., All rights reserved.