Formal and Informal Credit Markets Linkage.pdf

Formal and Informal Credit Markets Linkage PDF

Arindam Laha

In a multi-agency delivery mechanism of provision of credit, institutional credit is characterized by persistent excess demand as credits from these institutions are subsidized. In this situation, horizontal interlinkage resulted in spilling over of the excess demand for credit from the formal to the informal credit sources. Again another form of interaction is known as vertical interlinkage where informal lenders are viewed as having access to formal sources of lending, and the funds thus borrowed are then re-lent. An attempt has been made in the study to examine the implications of such linkages on achieving financial inclusion in the context of Indian economy. The interlinkage between formal and informal credit markets has also important implications to monetary policy as it is observed that the absence of any interlinkage implies weakening of the monetary policy as an effective tool. This book is expected to satisfy the needs of the students and scholars of Economics, Commerce and Finance. Moreover, the findings of the study are expected to be useful to the academicians of social sciences, planners and policy makers.

Two types of credit market: informal and formal • Formal market: banks (commercial or government), credit bureaus, etc. o Problem: often require collateral because of limited liability, which poor peasants can’t provide • Informal market: individuals o Can accept less traditional forms of collateral-- large landowner adjacent to poor farmer o Can more easily monitor each …

3659430307 ISBN
Englisch SPRACHE
Formal and Informal Credit Markets Linkage.pdf


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... unmet need for credit by all formal and informal MSMEs in emerging markets ... displays the relationship between the number of MSMEs in emerging markets ... Credit financing links refer to the transfer of funds from the formal sector for investment and development in the informal sector (Samal 2008). Market linkages are ...

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Vertical Linkage between Formal and Informal Credit ... Munich Personal RePEc Archive Vertical Linkage between Formal and Informal Credit Markets: Corruption and Credit Subsidy policy Chaudhuri, Sarbajit and Ghosh Dastidar, Krishnendu University of Calcutta, Jawaharlal Nehru University 15 December 2011 Online at MPRA Paper No. 35563, posted 25 Dec 2011 21:03 UTC

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of formal and infor mal credit markets assuming that formal and informal lenders face different agency and monitoring constraints (for example, informal lenders are able to closel y