The informal financial services cluster looks at the informal market and formally excluded populations. These populations are not well understood due to an overemphasis on the formally included populations. To understand these markets better, we need to employ new measurement dimensions that help us understand the drivers and barriers to formal financial inclusion.
We will look at what makes informal financial products attractive to consumers, based on the following domains:
- The use of informal financial institutions/arrangements and channels
- The drivers of using informal mechanisms
- Barriers to using formal mechanism
- A proxy for the cash (or in-kind) economy
- Existing linkages to the formal economy