An Overview of Informal Finance: Mapping the Research Landscape Using Bibliometric Analysis

Abstract

Informal finance mechanisms have proved its worth in providing essential credit delivery, saving and investment needs, and catering as a risk-sharing mechanism, more visible, in areas where there is limited reach of its formal counterpart. The study conducts a bibliometric analysis of 191 articles published from 1990 to 2024 to map the evolution of informal finance using the Web of Science database. Utilizing the Biblioshiny package for performance and VOSviewer application for science, the study covers the current trend of publications, nationwide contributions, institutional affiliation, the influential authors, and thematic clusters related to the field of informal finance. The results of the study reveal a steady increase of study in the related topics of informal finance in scholarly output post 2016, thus reflecting its rising importance in the financial inclusion processes, and developmental debates. Thematic analysis indicates that the current study in informal finance has shifted from micro-level studies to macro-level studies, demonstrating a scholarly progression from theoretical concepts to practical measurements in current scenario. Despite these progressions, we find persistence of regional concentrations, limiting geographical coverage on these financial developments, particularly from Africa and Latin America. The study further emphasizes the need for critically examining the interaction of informal financial practices as an advocate for financial inclusion, and promoting sustainable economic development. An understanding of the evolution of informal finance can assist policymakers in designing more effective financial mechanisms by incorporating its strengths into future financial policies. Future studies on related field can focus on the evolution of these arrangements, adaptations, and their response to modern technological changes, especially digital credit systems.