MONEYLENDERS AND INFORMAL FINANCIAL-MARKETS IN MALAWI

After a background review of the institutional financial services available to small and medium enterprises in Malawi, and a survey of the literature on Malawi's informal financial markets (IFMs), this paper presents a detailed report on the character and operations of a katapila moneylender in Lilongwe, Malawi. The moneylender market is then analyzed in terms of several themes from the literature on IFMs in less developed countries. For example, calculations show that the interest charges on katapila loans are not justified by economic costs of doing business. Finally, policy implications for promoting more efficient finance are discussed.