Informal credit markets are prevalent in many developing countries. Moneylenders, traders, unincorporated associations, families, and relatives provide credit and other financial services. In most cases, informal credit markets operate openly as they are not legally banned. However, they are also not subject to government regulation and control. So, they operate according to the local customs and norms. Informal credit markets play a critical role in the social and economic life of people with limited access to financial services from formal financial institutions. In this chapter, we provide an extensive review of informal credit markets. What social and economic functions do they provide to society, why do informal credit markets prevail even when formal financial institutions are geographically accessible to people, and how do governments and international development agents respond to informal credit markets? The theoretical discussion in this part provides insights into why the policy options to squeeze informal credit markets practically moneylenders have failed so far and what lesson can be taken from the nature and function of informal credit markets.