Informal finance in Egypt: “Banks” within banks

Policy makers often assume that individuals using informal finance are forced to do so because they lack access to formal financial services. Research in a large agricultural bank in Egypt, however, showed that many of its employees participated in informal finance. Interviews with villagers in a community with a branch of the bank also showed extensive involvement in informal finance. The popularity of informal finance among people with easy access to banks suggests that formal finance in Egypt may not be providing the types of financial services that people demand and they therefore, create these services informally.