Financing for the Poor: Between Formal and Informal Financial Institutions

Abstract

The phenomenon of informal financial institutions (moneylenders), which has existed in economic activities are economic phenomena that constantly take place. Various attempts to reduce the practice of informal financial institutions (rentenir) has done repeatedly. But in fact these efforts are not able to eliminate the practice of informal financial institutions. This study aims to determine how the poor public perception of the formal and informal financial institutions and determine transaction costs contained in the formal and informal financial institutions. To achieve these objectives, this study used a qualitative approach with case studies, which aims to understand thoroughly the institutional pattern in accessing loans from financial institutions formal and informal.

Keywords: formal financial institutions, informal financial institutions, transaction costs