n AfricaGrowth Agenda - Characteristics of Kenya's informal ("Jua Kali") economy and the unbanked : a briefing for the banking and financial markets

Volume 2008, Issue 4
  • ISSN : 1811-5187


Getting to grips with the informal economy is not easy for bankers and players in the financial markets. Reliable estimates or hard numbers on output and profits are hard to pin down. Players in the Informal ''Jua Kali'' economy take extra pains to ensure that they stay far away from the radar screen of regulators and the formal sector. Top of the list of agencies that they want to avoid at all costs is the taxman.

Reviews and studies undertaken in other emerging economies suggest that Kenya has an informal "under-ground" economy that is as much as 40% to 60% of the formal economy's GDP. Not all the output from the informal economy is necessarily illegal - it's just shielded from regulators and the formal sector. The labor force engaged in the informal economy provides the best measure of its size and importance. The following view of the informal economy draws heavily on the perspective of the ''un-banked and under - banked customers in the informal economy.

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