Linking Formal Finance with Micro and Informal Finance

Prabhu Ghate
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Prabhu Ghate: Independent Researcher and Consultant and was formerly a Senior Economist in the ADB.

Bangladesh Development Studies, 2000, vol. 26, issue 2-3, 201-215

Abstract: This paper first discusses the rationale for promoting linkages, or the flow of funds, between the formal financial sector on the one hand and Microfinance Institutions (MFIs) and informal lenders on the other. The next section discusses some issues that arise in promoting linkages with credit-NGOs, the most common form of MFI, both by banks, and by the Apex Financial Institutions (AFIs) that have been set up by governments to channel government and donor funds to MFIs. Section III discusses linkages in which the NGO instead of bearing credit risk and acting as a credit intermediary, plays the role of promoter of direct linkages between the banks and borrower groups. The last section is a case study of promoting linkages in India with pawnbrokers, one of several sources of informal credit for microente

Keywords: Banks; Bank loans; Lenders; Pawnbrokers Savings; Bank credit Loan rates; Nongovernmental organizations (search for similar items in EconPapers)
JEL-codes: A12 (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:ris:badest:0401

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