Informal finances in other countries

Predominance of non-institutional finance is not unique to India; it is more widespread. It is not only in the developing countries but also in more advanced economies like Brazil, Russia, China, self raised fund, primarily borrowed from non-institutional sources like moneylenders, friends and relatives, business partners, traders, distributors, profits from business, etc, constitutes a large part of their total financing in new investments.

The non-corporate forms of organisations are major players in such activities as manufacturing, construction, transport, trade, hotels and restaurants, and business and personal services. Terming them as "un-organised" is inappropriate as they are well-organised from the economic and organisational point of view. They are not the residual segment of the economy. They are very much part of the "formal" system of laws/rules/regulations. Hence, we will use the term of Uninc (unincorporated) or sometimes non-corporate sector.

References:

1)       R. Vaidyanathan "Understanding the unorganised sector" 2004.

2)       Anjula Gurtoo and Colin C. Williams "Entrepreneurship and the informal sector".

3)       S SAKTHIVEL, PINAKI JODDAR "Unorganised Sector Workforce in India".

About the Authors

Dr. P. Vikkraman is the Asst. Prof. MBA in Anna University, Coimbatore. Tamilnadu and Mr. S. Basakran is the Faculty, MBA in HKBK College of Engg. Bangalore.