ABSTRACT
Business skills of entrepreneurs and workers in the informal economy provide the foundation for their financial success and improved quality of life. Efforts to enhance this human capital is strongly connected to the availability of financial resources. Individuals and enterprises operating with an extralegal status usually require borrowing and other financial transactions through informal activities. Bruton, Ireland, and Ketchen (2012) bring forth this issue with an emphasis on the trust that must exist when extending and repaying a non-legally binding loan. An initial viewing of the informal financial services environment indicates consumer credit transactions as the primary activity. However, as a result of the need for other services, various financial product offerings have developed. As noted by Collins, Morduch, Rutherford, and Ruthven (2009), informal services are used since the need to save often exceeds demand for borrowing. Beyond loans, various savings vehicles allow informal business proprietors and households an opportunity to smooth erratic cash flows and accumulate funds for large expenditures. To reduce uncertainty from varied financial risks, insurance schemes are created. Informal networks for transfers of funds, including remittances, may include traditional exchanges along with expanded use of mobile technology.
