ABSTRACT
The discussion of monetary policy elsewhere in this book has concentrated on the formal financial sector (FFS), that is, the commercial banks and various specialised financial institutions created and licensed by the governments in many developing countries to target long-term investment to particular regions or groups. The picture would, however, be incomplete without some consideration of the informal financial sector (IFS) that exists in developing countries. 'Financial dualism' involves more than simply the dichotomy between FFS and IFS. The customers of the institutions in the FFS and IFS are also both 'formal' and 'informal' (see for example Germidis el al. 1991: 13, and for a fuller discussion of the IFS, Thomas 1992).
