Imperial College London

Professor Franklin Allen

Business School

Executive Director of the Brevan Howard Centre



+44 (0)20 7594 9195f.allen Website CV




2.05B52-53 Prince's GateSouth Kensington Campus






BibTex format

author = {Allen, HF and Qian, M and Xie, J},
doi = {10.1016/j.jfi.2018.06.004},
journal = {Journal of Financial Intermediation},
pages = {19--33},
title = {Understanding informal financing},
url = {},
volume = {39},
year = {2019}

RIS format (EndNote, RefMan)

AB - This paper offers a framework to understand informal financing based on mechanisms to deal with asymmetric information and enforcement. We find that constructive informal financing such as trade credits and family borrowing that relies on information advantages or an altruistic relationship is associated with good firm performance. Underground financing such as money lenders who use violence for enforcement is not. Constructive informal financing is prevalent in regions where access to bank loans is extensive, while its role in supporting firm growth decreases with bank loan availability. International comparisons show that China is not an outlier but rather average in using informal financing.
AU - Allen,HF
AU - Qian,M
AU - Xie,J
DO - 10.1016/j.jfi.2018.06.004
EP - 33
PY - 2019///
SN - 1042-9573
SP - 19
TI - Understanding informal financing
T2 - Journal of Financial Intermediation
UR -
UR -
UR -
VL - 39
ER -