Access to Finance
Special Issue - Access to Finance
"Access to Finance", Volume 22, Number 3, (2008) is guest edited by Thorsten Beck and Asli Demirguc-Kunt.
“Reforms that promote access to financial services should be at the core of the development agenda... Better access to finance not only increases economic growth, but also helps fight poverty, and reduces income gaps between rich and poor people.”
Asli Demirgüç-Kunt, Guest Editor, and Senior Research Manager, Finance and Private Sector at the World Bank.
Overview
A conference co-sponsored by the Finance and Private Sector Development Team
of the World Bank’s Development Research Group and The World Bank Economic
Review in March 2007, and a Policy Research Report published by The World Bank in November 2007, "Finance for All? Policies and Pitfalls in Expanding Access" are the basis for this special issue on "Access to Finance". Papers in this special issue address a wide range of issues related to access to finance and are at the frontier of knowledge in this area.
While the relationship between aggregate financial depth and economic development has been extensively researched, access to financial services by small and micro enterprises and households has become an increasingly important research topic only in recent years. The special issue seeks to address the concerns raised, and considers the following.
• What is the degree of access to and use of financial services by firms and households across countries and what drives the variation?
• Does improved access have an impact on individual welfare, firm growth and aggregate economic growth and poverty reduction?
• What policies are effective in expanding outreach and inclusion?
Among the findings are that financing obstacles are amongst the most binding constraints for firm operation and growth, compared to other elements of the business environment. At the same time, there are very high supply-side barriers for both enterprises and households to accessing banking services in many developing countries.
Trust in a country’s institutions is an important demand-side factor that determines whether people access formal banking services. Experimental evidence from Mexico shows the high returns on investment for microentrepeneurs, thus suggesting that poor borrowers are potentially profitable customers of banks. Nevertheless, survey results from Indonesia show that many borrowers use microloans for consumption rather than business purposes. Also, the take-up of micro insurance – a relatively new but promising product – still faces high barriers.
To view the special issue - click here.
Further details
For more information about the March 2007 conference, click here.
To view the Policy Research Report, "Finance for All? Policies and Pitfalls in Expanding Access", click here.
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