The Basic Analytics of Access to Financial Services

Access to financial services, or rather the lack thereof, is often indiscriminately decried as a problem in many developing countries. The authors argue that the "problem of access" should rather be analyzed by identifying different demand and supply constraints. They use the concept of an...

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Main Authors:	Beck, Thorsten, de la Torre, Augusto
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ACCOUNTING SYSTEMS ADVERSE SELECTION AGENCY PROBLEMS AGGREGATE DEMAND AGGREGATE SUPPLY ASYMMETRIC INFORMATION BANK ACCOUNTS BANK BRANCHES BANKING SYSTEM BORROWING CAPITAL REQUIREMENTS CATERING CHECKING ACCOUNTS COMPETITION COMPETITIVENESS CONSOLIDATION CONTESTABILITY CONTRACT ENFORCEMENT CREDIT RISK DEFAULT RISK DEMAND CURVE DEMAND CURVES DEMAND SIDE DEPOSIT ACCOUNTS DEPOSITS DEREGULATION DISECONOMIES OF SCALE ECONOMIC ECONOMIC DEMAND ECONOMIC GROWTH ECONOMIC SIZE ECONOMIES OF SCALE EMERGING MARKETS ETHNIC GROUPS EXTERNALITIES FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS HEALTH SERVICES IMPERFECT COMPETITION INCOME INEFFICIENCY INFLATION INFLATION RATE INSURANCE INTEREST RATE LENDING PRACTICES LIQUIDITY LOTTERY MARKET POTENTIAL MARKET STRUCTURE MARKETING MERGERS MORAL HAZARD NETWORK EXTERNALITIES NOMINAL INTEREST RATE OPERATIONAL RISK PAYMENT SYSTEMS PER CAPITA INCOME POLICY POTENTIAL DEMAND PRESENT VALUE PRODUCTION FUNCTION PRODUCTION FUNCTIONS PROFIT FUNCTIONS PUBLIC GOOD REAL INTEREST RATE REGULATORY FRAMEWORK REGULATORY POLICY RETAIL SAVINGS SAVINGS ACCOUNTS SAVINGS BANKS SAVINGS RATES SECURITIES SMALL BANKS SPREAD SUBSIDIARIES SUPPLIERS SUPPLY CURVE SUPPLY CURVES SUPPLY SCHEDULE SYSTEMIC RISK TRANSACTION COSTS TRANSACTIONS COSTS TRANSPORT VOLATILITY WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2006/10/7105064/basic-analytics-access-financial-services http://hdl.handle.net/10986/9271

id	okr-10986-9271
recordtype	oai_dc
spelling	okr-10986-92712021-04-23T14:02:41Z The Basic Analytics of Access to Financial Services Beck, Thorsten de la Torre, Augusto ACCOUNTING ACCOUNTING SYSTEMS ADVERSE SELECTION AGENCY PROBLEMS AGGREGATE DEMAND AGGREGATE SUPPLY ASYMMETRIC INFORMATION BANK ACCOUNTS BANK BRANCHES BANKING SYSTEM BORROWING CAPITAL REQUIREMENTS CATERING CHECKING ACCOUNTS COMPETITION COMPETITIVENESS CONSOLIDATION CONTESTABILITY CONTRACT ENFORCEMENT CREDIT RISK DEFAULT RISK DEMAND CURVE DEMAND CURVES DEMAND SIDE DEPOSIT ACCOUNTS DEPOSITS DEREGULATION DISECONOMIES OF SCALE ECONOMIC ECONOMIC DEMAND ECONOMIC GROWTH ECONOMIC SIZE ECONOMIES OF SCALE EMERGING MARKETS ETHNIC GROUPS EXTERNALITIES FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS HEALTH SERVICES IMPERFECT COMPETITION INCOME INEFFICIENCY INFLATION INFLATION RATE INSURANCE INTEREST RATE LENDING PRACTICES LIQUIDITY LOTTERY MARKET POTENTIAL MARKET STRUCTURE MARKETING MERGERS MORAL HAZARD NETWORK EXTERNALITIES NOMINAL INTEREST RATE OPERATIONAL RISK PAYMENT SYSTEMS PER CAPITA INCOME POLICY POTENTIAL DEMAND PRESENT VALUE PRODUCTION FUNCTION PRODUCTION FUNCTIONS PROFIT FUNCTIONS PUBLIC GOOD REAL INTEREST RATE REGULATORY FRAMEWORK REGULATORY POLICY RETAIL SAVINGS SAVINGS ACCOUNTS SAVINGS BANKS SAVINGS RATES SECURITIES SMALL BANKS SPREAD SUBSIDIARIES SUPPLIERS SUPPLY CURVE SUPPLY CURVES SUPPLY SCHEDULE SYSTEMIC RISK TRANSACTION COSTS TRANSACTIONS COSTS TRANSPORT VOLATILITY WEALTH Access to financial services, or rather the lack thereof, is often indiscriminately decried as a problem in many developing countries. The authors argue that the "problem of access" should rather be analyzed by identifying different demand and supply constraints. They use the concept of an access possibilities frontier, drawn for a given set of state variables, to distinguish between cases where a financial system settles below the constrained optimum, cases where this constrained optimum is too low, and-in credit services-cases where the observed outcome is excessively high. They distinguish between payment and savings services and fixed intermediation costs, on the one hand, and lending services and different sources of credit risk, on the other hand. The authors include both supply and demand side frictions that can lead to lower access. The analysis helps identify bankable and banked population, the binding constraint to close the gap between the two, and policies to prudently expand the bankable population. This new conceptual framework can inform the debate on adequate policies to expand access to financial services and can serve as the basis for an informed measurement of access. 2012-06-26T18:12:35Z 2012-06-26T18:12:35Z 2006-10 http://documents.worldbank.org/curated/en/2006/10/7105064/basic-analytics-access-financial-services http://hdl.handle.net/10986/9271 English en_US Policy Research Working Paper; No. 4026 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING ACCOUNTING SYSTEMS ADVERSE SELECTION AGENCY PROBLEMS AGGREGATE DEMAND AGGREGATE SUPPLY ASYMMETRIC INFORMATION BANK ACCOUNTS BANK BRANCHES BANKING SYSTEM BORROWING CAPITAL REQUIREMENTS CATERING CHECKING ACCOUNTS COMPETITION COMPETITIVENESS CONSOLIDATION CONTESTABILITY CONTRACT ENFORCEMENT CREDIT RISK DEFAULT RISK DEMAND CURVE DEMAND CURVES DEMAND SIDE DEPOSIT ACCOUNTS DEPOSITS DEREGULATION DISECONOMIES OF SCALE ECONOMIC ECONOMIC DEMAND ECONOMIC GROWTH ECONOMIC SIZE ECONOMIES OF SCALE EMERGING MARKETS ETHNIC GROUPS EXTERNALITIES FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS HEALTH SERVICES IMPERFECT COMPETITION INCOME INEFFICIENCY INFLATION INFLATION RATE INSURANCE INTEREST RATE LENDING PRACTICES LIQUIDITY LOTTERY MARKET POTENTIAL MARKET STRUCTURE MARKETING MERGERS MORAL HAZARD NETWORK EXTERNALITIES NOMINAL INTEREST RATE OPERATIONAL RISK PAYMENT SYSTEMS PER CAPITA INCOME POLICY POTENTIAL DEMAND PRESENT VALUE PRODUCTION FUNCTION PRODUCTION FUNCTIONS PROFIT FUNCTIONS PUBLIC GOOD REAL INTEREST RATE REGULATORY FRAMEWORK REGULATORY POLICY RETAIL SAVINGS SAVINGS ACCOUNTS SAVINGS BANKS SAVINGS RATES SECURITIES SMALL BANKS SPREAD SUBSIDIARIES SUPPLIERS SUPPLY CURVE SUPPLY CURVES SUPPLY SCHEDULE SYSTEMIC RISK TRANSACTION COSTS TRANSACTIONS COSTS TRANSPORT VOLATILITY WEALTH
spellingShingle	ACCOUNTING ACCOUNTING SYSTEMS ADVERSE SELECTION AGENCY PROBLEMS AGGREGATE DEMAND AGGREGATE SUPPLY ASYMMETRIC INFORMATION BANK ACCOUNTS BANK BRANCHES BANKING SYSTEM BORROWING CAPITAL REQUIREMENTS CATERING CHECKING ACCOUNTS COMPETITION COMPETITIVENESS CONSOLIDATION CONTESTABILITY CONTRACT ENFORCEMENT CREDIT RISK DEFAULT RISK DEMAND CURVE DEMAND CURVES DEMAND SIDE DEPOSIT ACCOUNTS DEPOSITS DEREGULATION DISECONOMIES OF SCALE ECONOMIC ECONOMIC DEMAND ECONOMIC GROWTH ECONOMIC SIZE ECONOMIES OF SCALE EMERGING MARKETS ETHNIC GROUPS EXTERNALITIES FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SYSTEMS FIXED COSTS FOREIGN BANKS HEALTH SERVICES IMPERFECT COMPETITION INCOME INEFFICIENCY INFLATION INFLATION RATE INSURANCE INTEREST RATE LENDING PRACTICES LIQUIDITY LOTTERY MARKET POTENTIAL MARKET STRUCTURE MARKETING MERGERS MORAL HAZARD NETWORK EXTERNALITIES NOMINAL INTEREST RATE OPERATIONAL RISK PAYMENT SYSTEMS PER CAPITA INCOME POLICY POTENTIAL DEMAND PRESENT VALUE PRODUCTION FUNCTION PRODUCTION FUNCTIONS PROFIT FUNCTIONS PUBLIC GOOD REAL INTEREST RATE REGULATORY FRAMEWORK REGULATORY POLICY RETAIL SAVINGS SAVINGS ACCOUNTS SAVINGS BANKS SAVINGS RATES SECURITIES SMALL BANKS SPREAD SUBSIDIARIES SUPPLIERS SUPPLY CURVE SUPPLY CURVES SUPPLY SCHEDULE SYSTEMIC RISK TRANSACTION COSTS TRANSACTIONS COSTS TRANSPORT VOLATILITY WEALTH Beck, Thorsten de la Torre, Augusto The Basic Analytics of Access to Financial Services
relation	Policy Research Working Paper; No. 4026
description	Access to financial services, or rather the lack thereof, is often indiscriminately decried as a problem in many developing countries. The authors argue that the "problem of access" should rather be analyzed by identifying different demand and supply constraints. They use the concept of an access possibilities frontier, drawn for a given set of state variables, to distinguish between cases where a financial system settles below the constrained optimum, cases where this constrained optimum is too low, and-in credit services-cases where the observed outcome is excessively high. They distinguish between payment and savings services and fixed intermediation costs, on the one hand, and lending services and different sources of credit risk, on the other hand. The authors include both supply and demand side frictions that can lead to lower access. The analysis helps identify bankable and banked population, the binding constraint to close the gap between the two, and policies to prudently expand the bankable population. This new conceptual framework can inform the debate on adequate policies to expand access to financial services and can serve as the basis for an informed measurement of access.
format	Publications & Research :: Policy Research Working Paper
author	Beck, Thorsten de la Torre, Augusto
author_facet	Beck, Thorsten de la Torre, Augusto
author_sort	Beck, Thorsten
title	The Basic Analytics of Access to Financial Services
title_short	The Basic Analytics of Access to Financial Services
title_full	The Basic Analytics of Access to Financial Services
title_fullStr	The Basic Analytics of Access to Financial Services
title_full_unstemmed	The Basic Analytics of Access to Financial Services
title_sort	basic analytics of access to financial services
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/10/7105064/basic-analytics-access-financial-services http://hdl.handle.net/10986/9271
_version_	1764406538185736192

The Basic Analytics of Access to Financial Services

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