Informal credit: or, how does a rural community capitalize itself?

This paper reports some preliminary results of an on-going study into informal credit, the loan-granting arm of the informal sector. This study is being carried out in a relatively better-off peri-urban area of KwaZulu, which has a very strong, widely diffused informal sector supplying roughly one-third of the average household income. Areas of inquiry include the demand for credit, the debt burden, how informal credit now works, and whether formal credit can be expected to do it better.

Paper delivered at the ASSA Conference held in July, 1986.