Abstract:
The Sri Lankan financial system is dualized as the formal financial market and
informal (unorganized) financial market. The informal financial market
provides very important service in meeting the financial needs of units who
do not deal with the process of formal financial markets, especially in rural
areas. The most common informal financial market activities are professional
money lenders, part-time money lenders such as estate owners, traders,
smallholders, farmers, relations and friends etc. This study examines the
impact on informal money market activities for a Sustainable rural economy.
Primary data as well as secondary data used for this study. Secondary data are
extracted from the documentary sources. Primary data are gathered through
questionnaire and interview conduct with a purposive sample of 50 people.
This sample is selected from randomly selected Galukagame Grama Niladari
divisions of the Kuruwita Divisional Secretariat area. The study reveals that
most rural people suffering from professional money lenders, because of their
high-interest rates, insecurity feeling about their money which deposit in the
home etc. On the other hand, rural people easily can get money for an urgent
incident of their economy, without conditions, guarantors, don’t waste time,
improving saving abilities from the slate club, people can get much money at
the same time from the drawing etc. So, this research benefited the rural people
who transact with the informal money market without knowing about the true
color of informal money market activities.
