Informal Finance-A Case Study of North East India

Based on the various 'All India Debt and Investment Survey' reports, NSSO survey and primary data conducted in Indo-Myanmar border area, this study reviews the nature and domination of informal finance in the study area. In addition, by using logistic regression model this study analyses the factors influencing the borrowing decision of the household in the study area. The study found the non-existence of bank loan and domination of relatives and friends as a loan giver in the study area, which signals the presence of vicious circle i.e. borrowing money and loss borrowing money. Apart from that, the study provides an indication whether the rural family's employment or self-employment is related with money borrowing.