Access to Financial Services: Measurement, Impact, and Policies

Authors: Beck, Thorsten; Demirg-Kunt, Asli; Honohan, Patrick

Source: World Bank Research Observer, Volume 24, Number 1, 9 February 2009 , pp. 119-145(27)

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Abstract:

In many developing countries less than half the population has access to formal financial services, and in most of Africa less than one in five households has access. Lack of access to finance is often the critical mechanism for generating persistent income inequality, as well as slower economic growth. Hence expanding access remains an important challenge across the world, leaving much for governments to do. However, not all government actions are equally effective and some policies can even be counterproductive. This paper sets out principles for effective government policy on broadening access, drawing on the available evidence and illustrating with examples. The paper concludes with directions for future research.

Keywords: D31; G20; G21; O12; O16

Document Type: Research article

DOI: http://dx.doi.org/10.1093/wbro/lkn008

Publication date: 2009-02-09

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The World Bank Research Observer seeks to inform nonspecialist readers about research being undertaken within the Bank and outside the Bank in areas of economics relevant for development policy. Requiring only a minimal background in economic analysis, its surveys and overviews of key issues in development economics research are intended for policymakers, project officers, journalists keeping up to date, and teachers and students of development economics and related disciplines. Papers for the Observer are not sent out to referees, but all articles published are assessed and approved by the Editorial Board, which includes three to four distinguished economists from outside the Bank. The Observer has nearly 1,500 subscribers in OECD countries and nearly 10,000 subscribers in developing countries.

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