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Investigating Informal Investment Schemes in Jamaica

Date Published: 
January, 2008
Lead Researcher(s): 
Thematic Area: 

There has been a proliferation of informal investment schemes (IIS) in Jamaica. At least 14,000 Jamaicans are likely to have invested in these schemes with the total number probably being in the tens of thousands. This study discusses the extent to which Jamaicans are likely to invest in informal schemes, and how investment returns are being used in the economy. Real country cases are utilized to highlight the impact of these schemes on the livelihoods of households and the economy in general. With the recent failure of several IIS in Jamaica, CaPRI’s analysis suggests that the middle class profile of investors will allow for the absorption of losses and that social unrest will be short-lived. There is therefore no need for the government to bail out this informal sector in the event of a collapse; efforts should be focussed on implementing appropriate policies to prod IIS into formalization.