What are the advantages and disadvantages of informal sources of credit?
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The advantages of the informal economy is that it provides income and employment to all people regardless of education, experience etc that a formal economy is deemed to be relying on.
Most people who are employed also find themselves engaged in the informal economy to support their living expenses.
The informal economy is never recognized and as such there are no regulations surrounding it. It is also where illegal activities flourish and petty crimes are mostly associated with the informal sectors.
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