The Role of Formal and Informal Finance in Economic Development

There is an apparent assumption amongst policymakers despite evidence of heavy and increasing reliance on informal finance, the co-existence formal financial markets, linkages between finance economic outcomes that, rather than needed for development. The objective this study to examine role in Economic Development. We use White Heteroscedasticity Adjusted Two-Stage Least Squares Regression estimation, with measures regulatory framework protecting consumers as instruments. find while access services has a positive effect development irrespective country’s income status, may positively or negatively affect depending its source. Further, level development, unfavourable high middle-income economies. Our findings indicate that policy choice broadening right direction. Policymakers should thus intensify efforts at expanding enhanced Nevertheless, be mindful source contingent impact