How does the informal economy affect financial inclusion and entrepreneurial activity of consumers? We investigate the impact of informal lending on the types and terms of contracts offered by formal lenders, considering factors that facilitate informal lending activity such as social ties...

Small and medium enterprises (SMEs) represent the backbone of China's economy, yet they lack access to bank credit. SMEs thus rely on a wide range of alternative sources, including informal finance, online peer-to-peer (P2P) platforms, registered non-banking financial institutions (NBFIs), and...

This article discusses and analyses one of the most popular commercial contracts in China: private lending agreement. It refers to moneylending arrangements between a business borrower and its debt investors. Millions of private businesses in China, having limited access to the state-dominated...

The constraint on informal finance is commonly taken to be high costs and limited supply. But the majority of informal investors - family and friends - is often willing to supply funds at negative returns, and yet many borrowers tap family and friends only as a last resort. We explain this...