Formal and Informal Credit Markets Linkage

In a multi-agency delivery mechanism of provision of credit, institutional credit is characterized by persistent excess demand as credits from these institutions are subsidized. In this situation, horizontal interlinkage resulted in spilling over of the excess demand for credit from the formal to the informal credit sources. Again another form of interaction is known as vertical interlinkage where informal lenders are viewed as having access to formal sources of lending, and the funds thus borrowed are then re-lent. An attempt has been made in the study to examine the implications of such linkages on achieving financial inclusion in the context of Indian economy. The interlinkage between formal and informal credit markets has also important implications to monetary policy as it is observed that the absence of any interlinkage implies weakening of the monetary policy as an effective tool. This book is expected to satisfy the needs of the students and scholars of Economics, Commerce and Finance. Moreover, the findings of the study are expected to be useful to the academicians of social sciences, planners and policy makers.

Dr. Arindam Laha, M.Sc in Economics (Gold Medalist, 2003), M.Phil (2005), Ph. D (2009), served as a faculty of Economics in Syamsundar College. He is currently working as Assistant Professor in the Department of Commerce, The University of Burdwan, India. He has written two books and has published a number of research articles in reputed journals.