Paper short abstract:

Debates on financial inclusion are disconnected from the diversity of motivations and social perceptions surrounding formal, and informal, financial mechanisms. This paper highlights the conflicting understandings amongst ASM stakeholders regarding the sector's financing and development trajectory.

Paper long abstract:

Financial inclusion has become a mainstay of global development agendas, becoming axiomatic as a pillar of poverty reduction and sustainable economic growth. Yet, billions of the world's 'unbanked' are financially included, albeit via informal means. Despite its popularity, and research on the wider informal economy drawing considerable attention, debates on informal finance have failed to gather considerable attention since the 80's and 90's.

One sector that is underpinned by finance is artisanal and small-scale mining (ASM) - labour-intensive, low-tech mineral extraction and processing. A string of interventions have proved unable to sustainably finance the sector, with undercapitalisation noted as impeding the sector's development and reinforcing its association with socio-economic and environmental harm. However, informal financiers, often the only source of much-needed credit to mining operations, have been continually persecuted. This research looks to merge current debates on the informal economy and informal finance to re-examine the 'parasitic' financiers of the ASM sector, who could be more symbiotic than widely believed.

This paper draws on the experiences from fieldwork conducted from September 2018 to August 2019, including interviews and participant observation from numerous case studies in the Malawian ASM sector. The motivations and social perceptions surrounding both informal, and formal, finance are questioned by drawing on the experiences of a range of local and international stakeholders. From this, reflections are made, inter alia, on the socio-economic sustainability of differing financial mechanisms and how this is, and could, effect the development trajectory of the ASM sector and its sustainable financing.