IDEAS home Printed from
   My bibliography  Save this paper

The relationship between the formal and informal sectors of the financial market in Ghana


  • Ernest Aryeetey


Early in 1989, a group of AERC researchers interested in studies of African financial markets, with a special emphasis on the informal sector, began several country studies that were scheduled to be completed in three phases. For the three phases it was agreed to: 1. characterize the informal sector, thereby analysing the rationale for its existence, estimating its size, and providing a detailed description of its operation on the financial market; 2. analyze the relationship between the formal and informal segments of the financial market, if any; and 3. establish the efficacy of macroeconomic policies, bearing in mind the existence of a strong informal financial sector. A high degree of characterization of the informal sector was achieved in the first phase of the Ghana study (Aryeetey and Gockel (1990)), following a study of 1000 market women in three Ghanaian cities. Repeated observations that in fact there were not two financial markets, but one highly fragmented one encouraged a deeper probe into the relationship between the different segments. This report is the outcome of the second-phase efforts in that direction. We use the activities of moneylenders to represent the lending side of the informal sector, while that of susu collectors represents the savings-mobilization capabilities of the sector. This does not suggest that they are the only forms the informal sector takes, but linkages with the formal sector are best portrayed through them.

Suggested Citation

  • Ernest Aryeetey, 1992. "The relationship between the formal and informal sectors of the financial market in Ghana," Research Papers RP_10, African Economic Research Consortium.
  • Handle: RePEc:aer:rpaper:rp_10

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. C.C. Okeahalam & D.W. Adams, 2000. "Banks and Micro-Finance in Namibia," South African Journal of Economics, Economic Society of South Africa, vol. 68(1), pages 52-64, March.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aer:rpaper:rp_10. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Steven Kinuthia). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.