Abstract
Argues that the current contributions of the Madagascar financial system to generating investment, employment and incomes in the Madagascar economy is inadequate and suggests policy and structural transformations that can be initiated to greatly improve the macroeconomic context for labour market outcomes. Stresses, especially, the impacts on employment and incomes of improved access to credit by households, and by infrastructure investments in key sectors that can improve domestic linkages in the Madagascar economy. Outlines policies that can be undertaken by the government and central banks, including loan guarantees, direct lending, and asset backed reserve requirements that can make financial assets more directly available to small producers and businesses in key sectors, including agriculture and that can counter some of the negative consequences of real exchange rate appreciation.