Search

The Philippines’ experience in implementing the social amelioration program (SAP) in response to the Coronavirus disease 2019 (COVID-19) pandemic highlights the pressing need for financial inclusion, especially among the poor. The absence of a national identification (ID) system and low bank account ownership posed a challenge in the delivery of SAP. The Government of the Philippines (GoP) expedited the development and registration for the national ID system (PhilSys) and used the opportunity to facilitate bank account opening. Not only ownership of bank or mobile money accounts but also accessibility to financial services is essential for financial inclusion. This study assesses the challenges and opportunities in financial inclusion, especially among the poor in remote communities. First, the study carries out a mapping of all financial transaction points and estimates the travel time to the nearest point. Second, the map is superimposed with the poverty and potential vulnerability of families in remote communities. Finally, the study assesses the coverage of 4Ps in remote areas in view of the potential challenges in implementing the social assistance program in hard-to-reach communities.

The International Finance Corporation (IFC) commissioned a consumer and market study to explore economic activities, employment trends, consumption levels, and consumer preferences of refugees and host communities in Uganda’s largest refugee-hosting areas in the Southwest and West Nile regions. The study covers a gap in existing research on the economic situations of forced displacement, which is often conducted from a humanitarian perspective and rarely offers the private sector view. The study presents the refugees’ economic activities in their distinct roles as consumers, producers, suppliers, and salaried workers from the view of a private sector firm entering the market. It builds on earlier research conducted by the Uganda Investment Authority, in partnership with the United Nations Development Program (UNDP), which produced investment profiles for refugee-hosting districts. The report is divided into eight chapters. Chapter one introduces the study. Chapter two outlines the study methodology. Chapter three provides socioeconomic baseline data, such as educational attainment, employment, and income, comparable by region and population group (refugees versus host communities). Chapter four explores access to telecommunication and financial services. Chapter five analyzes household consumption expenditure, the volume of economic activity, consumer preferences, and access to finance and telecommunication services. Chapter six discusses findings from the business survey. Chapter seven briefly looks at agricultural value chains in the Southwest and West Nile. Chapter eight presents investment opportunities in the refugee-hosting districts for the private sector.

The relevance of the analysis of the draft guidelines for the development of the Russian financial market in 2019–2021 set forth in the draft program document issued by the Bank of Russia comes from the fact that in the current situation of the macroeconomic and financial instability Russia’s entry into the top five leading world economies is impossible unless business entities have access to internal sources of financing, primarily to debt and equity financing instruments, as well as to risk insurance tools.The subject of the research is the plans of the Bank of Russia for the development of the Russian financial market in 2019–2021 set out in the draft program document of the Bank of Russia to be approved in the summer of 2019. The purpose of the paper was to assess the above guidelines in terms of whether they can achieve the goal of boosting the growth and efficiency of the economy. Proposals are made to harmonize issues related to the development of the financial market with monetary and fiscal policy issues.The paper concludes that it is necessary to seek a balance between financial stability and stimulation of business activities of banks in the cooperation between the Bank of Russia and business corporations. It is noted that the program of the financial market development does not include issues related to the development of certain segments of the financial market (foreign exchange and precious metals markets).

Using data of 265 Chinese cities from 2010 to 2017, we studied the impact of access to digital financial services on green technology advances in the context of regional competition. We found that access to digital financial services significantly promotes green technology advances within the region but inhibits those in other regions. We also found that modest regional competition can promote green technology advances, whereas excessive competition impairs the positive relationship between access to digital financial services and green technology advances. We identified a significantly positive spatial spillover effect for green technology advances.

This research was conducted with the objective of determining the incidence of the services provided by non-bank correspondents in the financial inclusion of the users of the Jama canton during the period 2015-2020, for this purpose a quantitative-qualitative methodology was used. Also applying the hypothetical, analytical, descriptive, bibliographic method and Pearson's correlation coefficient regression measure. For the collection of information, two surveys were designed as research instruments, which were addressed to 15 non-bank correspondents and another questionnaire that amounts to a total of 379 users who access the service offered by the correspondents. Once all the information was collected, it was found that the non-bank correspondents in the Jama canton provide some financial services, among which withdrawals and deposits stand out; on the other hand, the financial needs of the users have changed during the different years of the study. However, withdrawals have become the main financial need of users. Finally, it was found that there is a strong relationship between the financial services provided by the CNBs and the financial inclusion of the canton's users. Once the main results were known, it was possible to conclude that non-bank correspondents contribute positively to financial inclusion because there are no head offices, branches or agencies of financial entities within the canton that provide financial services to their clients and to the canton in general., La presente investigación se realizó con el objetivo de determinar la incidencia de los servicios que prestan los corresponsales no bancarios en la inclusión financiera de los usuarios del cantón Jama durante el período 2015-2020, para ello se utilizó una metodología de tipo cuantitativa-cualitativa. Aplicando además el método hipotético, analítico, descriptivo, bibliográfico y la medida de regresión coeficiente de correlación de Pearson. Para la recopilación de información se diseñaron dos encuestas como instrumentos de investigación, que fueron dirigidas a 15 Corresponsales no bancarios y otro cuestionario de preguntas que asciende a un total de 379 usuarios que acceden al servicio que ofertan los corresponsales. Una vez recopilada toda la información se obtuvo como resultado que los corresponsales no bancarios del cantón Jama prestan algunos servicios financieros entre los que se destacan los retiros y depósitos, por otra parte, las necesidades financieras de los usuarios han cambiado durante los diferentes años de estudio. Sin embargo, los retiros se convierten en la principal necesidad financiera de los usuarios. Por último, se logró conocer que existe una relación fuerte entre los servicios financieros que prestan los servicios de los CNB y la inclusión financiera de los usuarios del cantón. Una vez conocidos los principales resultados se pudo concluir que los corresponsales no bancarios aportan de manera positiva a la inclusión financiera porque no existe matriz, sucursal o agencias de entidades financieras dentro del cantón que presten servicios financieros a sus clientes y al cantón en general.

The China Banking Regulatory Commission (CBRC) has maintained its momentum in regulation and supervision in the face of exceptional growth in scale and increasing complexity of the banking system. Equally, the CBRC has risen to the demands of the international regulatory reform agenda, delivering timely revisions to its body of regulations and maturing its supervisory practices through investing in essential new skills, enhancing methodologies, and broadening its interactions with the industry. In this context, the clarity of supervisory requirements and expectations communicated to the industry is a strength of the CBRC. Recent organizational reforms, in 2015, building on other internal reforms, will serve the CBRC well in delivering its supervisory mandate. While pursuit of financial stability is recognized as fundamentally important, concerns must be acknowledged as to whether the CBRC would, in practice, always be able to act on its primary, stability, objective, especially if government policies, whether focused growth and expansion, or social protection, conflicted with prudential considerations. The China Banking Regulatory Commission (CBRC) has achieved a high degree of compliance with the Basel Core Principles for Effective Banking Supervision (BCPs). Notwithstanding the revision to the BCP methodology, which raised the standards expected of supervisory authorities, the CBRC has demonstrated progress in almost all areas. Nevertheless, further maturing is needed, and taken together the recommendations of this report seek to support the CBRC in developing deeper and more comprehensive diagnostic capabilities, which ought to facilitate early, effective and preventative actions as necessary. It is essential that the CBRC’s achievements in recent years are consolidated as new challenges and complexities in the system will continue to emerge. In particular, it is essential that the CBRC obtain the resources to expand its range and depth of skills before developments in the industry leave it unable to maintain meaningful oversight and authority, not least of the four Global Systemically Important Banks (GSIBs). Building on the supervisory vision expressed in prestige CBRC publications such as the Annual Report, a detailed forward strategy for supervision, covering three to five years, would serve as a vehicle for the CBRC to articulate its case for resources.

A healthy and growing economy is built on a financial system that moves funds from people who save to people who have productive investment opportunities. In the presence of market imperfections, financial intermediaries help to reduce transaction costs and information asymmetries. Therefore, it is important to examine how financial intermediaries function, and what are the policy implications. This dissertation focuses on the functioning of financial intermediaries, from both macro and micro perspectives. It identifies the factors that determine access to financial services, including macro factors in cross-border banking and bank branching, and micro drivers of credit access. These findings call for coordination among regulatory authorities in a financial interdependent world.

Nous utilisons des données issues d'enquêtes sur les ménages et auprès des organismes de réglementation bancaire, afin d'explorer l'impact de l'accès aux services financiers (ASF) sur la pauvreté, sur un large échantillon de pays en développement. En contrôlant pour la présence d'un éventuel biais d'endogénéité à l'aide de la méthode des variables instrumentales, nous montrons que l'ASF réduit significativement la pauvreté. Ce résultat, qui est robuste à l'utilisation de mesures alternatives d'ASF ou de pauvreté, ainsi qu'à l'introduction de plusieurs variables de contrôle, milite en faveur d'une place primordiale pour l'ASF dans la conception des Stratégies de réduction de la pauvreté.

This report aims to deepen the understanding of barriers to and incentives for the acceptance and use of electronic payments, from the perspective of micro, small and medium retailers (merchants). Developing and accelerating acceptance of electronic payments by these merchants is essential to expanding financial access. A basic transaction account for payments and deposits is considered an entry point to the formal financial system, and can act as a gateway for individuals to adopt other relevant financial services they need to smooth their consumption and manage income shocks. However, equipping individuals with only basic transaction accounts is not sufficient. The use case for payment services becomes increasingly effective as individuals gradually move to a cashless economy, where electronic payments are widely accepted for regular and frequent purchases. The report highlights important dimensions to consider in the efforts to expand electronic payments for merchants.

This paper evaluates the impact of access to credit from banks and other financial institutions on household welfare in Mauritania. Micro-level data from a 2014 household survey are used to evaluate the relationship between credit access, a range of household characteristics, and welfare indicators. To address potential endogeneity issues, the household isolation level is used to instrument access to credit. The results show that households headed by older, more educated people are more likely to access financial services, as are households located in urban areas. In addition, greater financial access appears to be associated with a reduced dependence on household production and increased investment in human capital.

Myanmar’s financial system is undergoing a rapid transformation. A history of economic isolation has left Myanmar with small and underdeveloped financial institutions and very low access to financial services. Since 2011, however, demands on the financial system have grown exponentially with increased trade and investment, growing household income, and expanding government operations. While recent reforms have stimulated financial sector growth, much more needs to be done to establish a competitive and vibrant financial sector that can meet the needs of Myanmar’s expanding economy, boost incomes, and reduce poverty particularly among those living in rural areas. Increasing access to financial services is critical to achieving shared prosperity in Myanmar.

Mali is a vast, land-locked country in West Africa with a population of approximately 14.9 million, and a GDP per capita of USD480. The economy is largely rural, with over two-thirds of the population living off agriculture, notably cotton. Gold is the country’s largest export, though production has been declining and the industry faces an uncertain future as proven reserves are limited. The service sector, which represents 40 percent of GDP, is dominated by trade and commerce. Mali’s dependence on crops and gold makes it vulnerable to terms of trade shocks. Industry, which employs just 3 percent of the active population, consists largely of small-scale food processing and textile plants. The overwhelming majority of the population (over 90 percent) works in the informal sector. The FSAP Development Module focused on: i) the banking sector and legal framework (credit to the economy); ii) microfinance; iii) agricultural finance; iv) insurance; and v) housing finance2. The mission carried out in-depth assessments on each topic and provided recommendations aiming at mitigating financial vulnerabilities and supporting the development of the financial sector (i.e. development the credit to the economy while insuring financial stability).

While the microfinance sector is extensively used in Mali (about 1 million members often based in rural areas), the sector has experienced a major crisis for over six years. The clean-up of the microfinance remains the most pressing priority for the Malian authorities and the adoption of the emergency plan for the microfinance sector is a key milestone to cleaning up the sector. While the plan addresses the main issues (restructuring or liquidation not viable MFIs; depositors indemnization mechanism; consolidation of active MFIs; reform and strengthening of the national supervisory body), but the implementation remains very challenging in a context of fiscal tightening and donor’s reluctance to intervene. It is only the Government of Mali that can restore confidence in the sector, and only by undertaking the recommendations highlighted in the emergency plan. One of the most sensitive issues will be to manage the liquidation of a few important distressed institutions together with the indemnization of their depositors.

The housing finance market in Mali remains small and under developed. Few banks currently offer a full mortgage product with Banque Malienne de Solidarite, Mali Housing Bank (BHM), Bank of Africa, and EcoBank being the main lenders although at minimal levels. The total annual housing need in Mali based on the household formation rate amounts to 82,500, split between 51,100 urban units and 31,400 rural units. Overall some social housing is constructed and support is provided by the state for low income housing through the Office Malienne de l’Habitat (OMH), but the numbers remain small. The Malien authorities have been working to strengthen financial sector stability which includes measures to stabilize the BHM and put it in a position where it begins to fulfill its mandate of providing credit for the housing sector. A strategy was approved by the council of Minister for a strategic disengagement by the state from the share capital of BHM. Initially the agreed plan was for BHM to be privatized. Overall progress in delivery of affordable housing will require a concerted effort among all stakeholders both in public and private sector. This should be supported through establishment of stakeholder coordination group to oversee change across the housing value chain.

Access to finance, particularly credit, is widely recognized as problematic for small and medium enterprises (SMEs), hampering their growth and development. To address this challenge, many governments around the world intervene in SME credit markets through credit guarantee schemes (CGSs). A CGS offers risk mitigation to lenders by taking a share of the lenders’ losses on SME loans in case of default. CGSs can contribute to expand access to finance for SMEs. Yet they may bring limited value added and prove costly if they are not designed and implemented well. There have been efforts in recent years to identify good practices for CGSs, but the international community still lacks a common set of principles or standards that can help governments establish, operate, and evaluate CGSs for SMEs. The Principles for Public Credit Guarantees for SMEs are filling this gap. The Principles provide a generally accepted set of good practices, which can serve as a global reference for the design, execution, and evaluation of public CGSs around the world. The Principles propose appropriate governance and risk management arrangements, as well as operational conduct rules for CGSs, which can lead to improved outreach and additionality along with financial sustainability. Developed through extensive consultations with stakeholders, the Principles draw from both the literature on good practices for CGSs and sound practices implemented by a number of successful CGSs around the world.

The performance of the Malian economy is largely dependent on the performance of the agricultural sector. The overall good growth in the Malian economy over the last several years is attributed to the agricultural GDP growth. Since 1995, the economy grew at about 5 percent per year until 2010, but a global recession, the military coup and terrorist activity caused a noticeable slowdown in GDP to about 1.2 percent in 2011-2012. The economic growth has resumed at a slow pace since 2013 and is currently estimated around 4.5 percent for 2014-2015. Agricultural development in general and agricultural finance in particular is hampered by a lack of quality data on the sector. Although improving, reliable statistical information is still lacking in Mali. There are often inconsistencies in agricultural data presented in the various reports available in the country. Although data on the main food crops and cotton are readily available, quality information on the high potential value chains, like mango and meat and dairy value chains, is less frequently provided. The lack of quality agricultural statistics makes public planning and analysis difficult and deters private sector investment.

Rural finance and credit services to smallholder farmers are high-risk activities. But there is hope for a boost because rural finance has a pivotal role to play amid rising food prices and the need to increase agricultural production.

Correspondent banking services are essential to enabling companies and individuals to transact internationally and make cross-border payments. Recently there have been indications that certain large international banks have started terminating or severely limiting their correspondent banking relationships with smaller local and regional banks from jurisdictions around the world. To find out whether this is indeed happening, the World Bank, with support from the Financial Stability Board (FSB) and the Committee on Payments and Market Infrastructures (CPMI), surveyed banking authorities and banks worldwide to examine the extent of withdrawal from correspondent banking, its drivers, and its implications for financial exclusion/inclusion. In total, 110 banking authorities, 20 large banks, and 170 smaller local and regional banks participated in this exercise. This document includes finding of the survey, conclusions, and recommendations.

In July 2013, the World Bank Group launched its Strategy, outlining how it will partner more effectively with clients to help them achieve the ambitious goals of eradicating extreme poverty and boosting shared prosperity through economic growth, inclusion, sustainability and resilience. In April 2014, the World Bank Group Corporate Scorecard was launched for the first time and the World Bank Scorecard revised to monitor the implementation of the strategy. The World Bank Group Scorecard provides view of the results and performance indicators of the three World Bank Group institutions: the World Bank (WB), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). This brochure presents the scorecards, updated with the latest data available in fiscal year 2015. The scorecards are structured in three tiers. A tier one and two presents indicators monitoring aspects of growth, inclusiveness, and sustainability and resilience. Tier three captures the progress in implementing the World Bank Group strategy and includes measures of both operational and organizational effectiveness.

Growing research and policy interest focuses on the misallocation of output and factors of production in developing economies. This paper considers the possible misallocation of financial loans. Using plant-level data on the organized and unorganized sectors, the paper describes the temporal, geographic, and industry distributions of financial loans. The focus of the analysis is the hypothesis that land misallocation might be an important determinant of financial misallocation (for example, because of the role of land as collateral against loans). Using district-industry variations, the analysis finds evidence to support this hypothesis, although it does not find a total reduction in the intensity of financial loans or those being given to new entrants. The analysis also considers differences by gender of business owners and workers in firms. Although potential early gaps for businesses with substantial female employment have disappeared in the organized sector, a sizeable and persistent gap remains in the unorganized sector.

This snapshot provides an overview of financial inclusion trends and challenges in Tunisia. It follows the recent expiration of the Coordinated Vision for the Development of Microfinance in Tunisia 2011-2014, national strategy published in 2011.

A well-functioning and inclusive financial sector is critical for efficient resource allocation leading to increased productivity, greater investment, higher overall levels of economic growth, and lower inequality. This is particularly critical in Iraq, where years of political instability and violence have impeded the development of a robust private sector. Microfinance services in Iraq are still nascent and far from meeting their full potential. This diagnostic report aims to present the microfinance landscape in Iraq, its legal and regulatory framework, and potential policy improvements to enhance the operating environment. It aims to inform public and private sector stakeholders on the regulations and laws affecting the development and strategic direction of the microfinance sector. The policy recommendations presented are designed to address factors preventing greater growth and outreach, with the goal of promoting inclusive financial sector development in Iraq.

This report will share key findings from the research, starting with an overview in section two of the international remittance context and the UK remittance market. It also provides a view on trends in the UK market, particularly in the wake of significant bank de-risking, leading many remittance service providers (RSPs) to seek out alternative banking solutions. Section three outlines the objectives of the research, the survey design and the sampling techniques for the fieldwork. This is followed by Section 4, which presents the empirical findings of the 602 interviews collected. It begins with demographic and economic characteristics of the participants before focusing on migrants’ attitudes and behaviors regarding remittance sending, using financial services, and savings and investment. Given the current environment for remittance service providers in the UK (and in several other countries) and the global commitment to reducing remittance costs, there is a focus on the service providers used and the costs incurred. Finally, the report concludes with a summary of the main findings and provides recommendations on addressing the barriers and issues faced by migrants in London regarding financial and remittance services, as well as potential areas of further inquiry.

Jordans economy continues to slowly but steadily recover from the Arab Spring spillovers. These spillovers include Egypts gas disruptions, the neighboring Syrian and Iraqi conflicts and associated security incidents. Notwithstanding these shocks, real GDP growth rate is estimated to have reached 3.1 percent in 2014, up 30 basis points over 2013. From the supply side, growth was led by construction, wholesale and retail trade, and finance and insurance, with a pick-up in the mining and quarrying sector. On the demand side, growth was predominantly fueled by higher public investments, mostly due to earmarked GCC grants, and a narrower trade deficit. The steady economic recovery has improved unemployment rates although this masks underlying structural weaknesses. While unemployment dropped from 12.6 to 11.9 percent from 2013 to 2014, this was not driven by increased employment but by an equivalent and concerning drop in the labor force participation rate. This was possibly driven by discouraged workers given perceived competition from refugees and limited hiring prospects in the public sector given ongoing consolidation efforts.

This technical note provides a snapshot of financial inclusion trends and challenges in Tunisia. It follows the recent expiration of the Coordinated Vision for the Development of Microfinance in Tunisia 2011-2014, national strategy published in 2011. This document does not examine all aspects of financial sector development, but rather concentrates specifically on financial inclusion for low-income households and micro-enterprises.

The Global Financial Inclusion (Global Findex) database, launched by the World Bank in 2011, provides comparable indicators showing how people around the world save, borrow, make payments, and manage risk. The 2014 edition of the database reveals that 62 percent of adults worldwide have an account at a bank or another type of financial institution or with a mobile money provider. Between 2011 and 2014, 700 million adults became account holders while the number of those without an account—the unbanked—dropped by 20 percent to 2 billion. What drove this increase in account ownership? A growth in account penetration of 13 percentage points in developing economies and innovations in technology—particularly mobile money, which is helping to rapidly expand access to financial services in Sub-Saharan Africa. Along with these gains, the data also show that big opportunities remain to increase financial inclusion, especially among women and poor people. Governments and the private sector can play a pivotal role by shifting the payment of wages and government transfers from cash into accounts. There are also large opportunities to spur greater use of accounts, allowing those who already have one to benefit more fully from financial inclusion. In developing economies 1.3 billion adults with an account pay utility bills in cash, and more than half a billion pay school fees in cash. Digitizing payments like these would enable account holders to make the payments in a way that is easier, more affordable, and more secure.

By increasing access to finance for out-of-reach households and families, microfinance continues to be an essential tool for improving livelihoods at the base of the pyramid. The last 20 years have seen remarkable growth in the microfinance sector. From its early stages in small-scale microenterprise lending, through its commercial expansion to offer savings and a broad array of financial services to low-income customers, to its entry into new markets and incorporation of technological innovations, microfinance is ensuring that an ever-greater number of households have permanent access to a range of high-quality and affordable financial services. The microfinance industry is estimated at $60 to $100 billion globally, where several thousand microfinance organizations reach an estimated 200 million clients, most of whom were not previously served by the formal financial sector. However, 2.5 billion adults still lack access to formal financial services. Financial services for low-income people are an important factor when it comes to poverty reduction, as it enables them to build assets, increase incomes and reduce their vulnerability to economic stress. Moreover, microfinance continues to be an important tool when it comes to empowering women. IFC is the World Bank Group s main investor in microfinance, working with around 300 microfinance institutions (MFIs) and SME-focused financial institutions, which provide financial services in 91 countries. IFC is also one of the leading global investors in terms of volume. In fiscal year 2014, we committed $519 million in 43 projects with MFIs. Our cumulative investment portfolio in microfinance exceeded $3.5 billion, with outstanding commitments of $2.0 billion. In fiscal year 2014, IFC advisory services comprised $74.2 million, representing advisory assistance for 86 projects. This smart book, titled from small beginnings to great opportunities, presents practical lessons learned from the work that authors have been doing on microfinance projects over the last twenty years. From launching the Microfinance Enhancement Facility to help the industry stay afloat during the time of crisis, to working on a project to support microfinance clients to fulfill their housing dreams, these narratives are both engaging and insightful.

Despite regulatory efforts designed to make it easier for firms to formalize, informality remains extremely high among firms in Sub-Saharan Africa. In most of the region, business registration in a national registry is separate from tax registration. This paper provides initial results from an experiment in Malawi that randomly allocated firms into a control group and three treatment groups: a) a group offered assistance for costless business registration; b) a group offered assistance with costless business registration and (separate) tax registration; and c) a group offered assistance for costless business registration along with an information session at a bank that ended with the offer of business bank accounts. The study finds that all three treatments had extremely large impacts on business registration, with 75 percent of those offered assistance receiving a business registration certificate. The findings offer a cost-effective way of getting firms to formalize in this dimension. However, in common with other studies, information and assistance has a limited impact on tax registration. The paper measures the short-term impacts of formalization on financial access and usage. Business registration alone has no impact for either men or women on bank account usage, savings, or credit. However, the combination of formalization assistance and the bank information session results in significant impacts on having a business bank account, financial practices, savings, and use of complementary financial products.