Travelers to North Africa, the Middle East, India, the Balkans, and countries throughout Asia have likely encountered a bazaar, where sellers gather to form an often large, tightly grouped assortment of small shops and stalls that offer food, clothing, household wares, and other items for sale. For tourists, these shopping experiences, with their vibrant display of local products, offer a unique method of experiencing a local culture, while also allowing for the purchase of souvenirs.

Like water, financing tends toward the path of least resistance. Likewise, when regulations are erected to restrict or otherwise guide the flow of financing, money often finds its way through more amenable pathways. Case in point: When the Great Financial Crisis of 2007-09 triggered tightening banking regulation to buttress the financial system against future shocks, corporate lending looked to sources outside the banking sector.

When Enron, a Texas-based energy trader and supplier, filed for bankruptcy in December 2001, its stock was trading at $0.26 per share. The prior year its share price peaked at $90.75. This stunning fall was not the result of economic shocks or events out of Enron’s control.

When COVID-19 swept the world in early 2020 and closed or restricted business activity, researchers and policymakers scrambled to determine the virus’s economic impact on everything from employment, income, and childcare to business closures, commercial property, and work-from-home strategies. Policymakers needed answers fast to plan the most efficacious responses and direct limited resources to benefit those who needed it the most.

Imagine that you are a wholesale provider of textiles to retailers who sell their wares in a large bazaar in one of many communities across India. As a wholesaler, you receive your inventory from a large supplier in say, Mumbai or Delhi. It’s a challenging business; margins are thin, and your livelihood depends on your retailers’ success. At the same time, retailers often do not have enough money to purchase your wares and, therefore, you need to provide credit. To whom do you lend? In an informal market that is absent balance sheets and sales data, who do you trust? Where do you get your information?