Informal Firms and Financial Inclusion: Status and Determinants

Subika Farazi ()
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Subika Farazi: Development Economics Research Group and Financial and Private Sector Development, The World Bank, 1818 H Street, NW, Washington, DC 20433, United States

Journal of International Commerce, Economics and Policy (JICEP), 2014, vol. 05, issue 03, 1-28

Abstract: Many firms in the developing world — including a majority of micro, small, and medium enterprises (MSMEs) — operate in the informal economy. The informal firms face a variety of constraints, making it harder for them to do business and grow. Lack of access to finance is often cited as the biggest operational constraint these firms face. This paper documents the use of finance and financing patterns of informal firms, highlights differences between use of finance by formal and informal firms, and identifies the most significant characteristics of informal firms that are associated with higher use of financial services.

Keywords: Informal sector; financial inclusion; firm registration; O12; O17; L20 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (21)

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DOI: 10.1142/S1793993314400110

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