The Challenges and Prospects of Financial Dualism in Modern Economies of West African States
Keywords:Financial dualism; Economic dualism; informal money market; formal money market; financial system
The study investigates the factors responsible for the survival and growth of the informal financial market in West African (WA). The objective was to identify the meaning of the term “Financial Dualism” and why it has persisted in developing economies. A descriptive and expost facto research method was adopted. Relevant literature was collated, classified, and analyze. The findings reveal that the banks and other financial institutions find it difficult to extend credit facilities to individuals and small and medium enterprises (SMEs). Sources of funding mostly available to SMEs and individuals in WA and other developing countries is the Informal financial market. Hence there is the prospect that financial dualism will continue to exist in the economies of the developing nations. The study recommends among others that the central banks of the various countries that make up WA should fund all the registered informal financial institutions.
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