In short cross-border trade often entails elaborate informal financial and credit
arrangements that, in turn, generate significant capital for local investment. This is
especially the case for cross-border trade in livestock, which often is the major asset and
store of capital in these areas. My observations also indicate that informal financial
arrangements associated with cross-border trade are far more complex than originally
envisioned. They entail issues of foreign exchange arbitrage; informal ‘letters of credit’
and wire transfers; use of revenues from livestock trade to cross-finance a range of
imports, food and non-food; sophisticated market information and clientage
relationships; and a variety of different social mechanisms to reduce transaction costs
(see Little et al. 2001).